Universitat Internacional de Catalunya
Impact Investment
Teaching staff
Upon request
Introduction
Impact Investment is an optative course with 3 ECTS taught on Official Master’s Degree on Entrepreneurial Finance program, at UIC Barcelona. It consists of 5 theoretical clases, 5 practical sessions, and 5 sessions dedicated to Master clases and conferences from professionals from sector of Social Finance. The course does not have any specific pre-requisites, although Business Adminsitration background is desirable.
The course widely applies case study methodology and in-class debate. Therefore, students, taking this course are expected to contribute to the classes through active and thoughtful participation.
Pre-course requirements
Basic knowledge in Business Administration
Objectives
The primary objective of this course is to give profound understanding of the Impact Investment discipline. Impact investing seeks to generate social impact in addition to financial returns. This investment strategy is widely used to address critical social and environmental issues, such as climate change, sustainable economic development, social inclusion of vulnerable and marginalized groups. Because of its success in contributing to the solution of social and environmental issues it has attracted an increasing interest from policy-makers and societal stakeholders which in turn pushes conventional investors to introduce impact investing in their portfolios. As a result, during the past decade impact investing has converted from a niche investment mechanism into becoming indispensable in the portfolio of a wide variety of investors, from mainstream banking to charity foundations.
There are, however, issues that make this instrument somewhat tricky. For example, the measurement of the result is difficult. If in conventional investing, return on investment (ROI) seem to be universally recognized as an accurate tool to measure investment success, impact investing presupposes the creation of a social and/or environmental impact, which is difficult to calculate. Another issue is its limitaitons in terms of scalability. Very often, social issues are very local and require unique solutions. Thus, one idea that suited to solve an issue in one context, can be difficult to transfer in another context, which makes it difficult to scale it up, - a feature that conventional investors carefully look for in a business model. And finally, if in conventional investing the focus is a company’s output (product or service), in the case of impact investing it is the outcome and its impact on beneficiaries. All these issues make this investment mechanism more challenging and requiring special skills from the investors’ side to understand the nature of impact investing to reach the desirable social and/or environmental impact.
Therefore, the aim of this subject is to provide students with necessary knowledge and skills to be able to develop good impact investing strategies, minimize possible negative outcomes that might jeopardize the investor’s reputation, and maximize the desirable social and/or environmental impact.
Competences/Learning outcomes of the degree programme
- CE1 - Devise appropriate financial planning from the initial phase of a startup to its later phases of business consolidation, with consideration for business analysis, business models and economic and financial analysis.
- CE4 - Detect and analyse the risk associated with financial decisions and implement strategies to minimise it.
- CE5 - Identify the legal aspects associated with financing the venture and the financial structures, and prepare documents and clauses to facilitate transaction management.
- CE6 - Analyse a startup’s accounts and finances, its financial modelling and company valuation, and understand what constitutes a successful corporate transaction.
- CE9 - Apply and adapt knowledge and experiences of entrepreneurship and financial structures in real contexts by analysing their viability, implementation and impact, thus gaining expertise in the creation of new market opportunities.
- CG1 - Work as part of multidisciplinary teams as a proactive member, helping to resolve conflict or problems that may arise.
- CG3 - Generate new ideas and critically evaluate alternatives against numerous criteria whilst bearing in mind the multiple actors involved.
- CG4 - Contrast ideas and make decisions with methodological rigour, being prepared to take full responsibility for these decisions.
- CT2 - Have the capacity to reflect and think critically in interdisciplinary contexts.
- CT3 - Show sensitivity for ethical, personal, social and environmental values when making decisions and building relationships with others.
Learning outcomes of the subject
By the end of the course, students will be able to:
- Understand, identify and analyse different impact investment tools;
- Understand the challenges of the sector;
- Handle the different measurement tools that help quantify the invest investing success at Spanish, European and global levels;
- Identify how to apply mechanisms, such as Theory of Change, to ensure the achievement of desirable outcomes.
Syllabus
Topic 1. Introduction and Overview: definitions, origins, challenges.
- Identification of a social need
- The origins of impact investing
- Social vs. financial return
Topic 2. Theory of Change
- What is social impact and why to measure it?
- Social impact indicators and measurement tools
- Theory of change
Topic 2. Microfinancing
- The concept of microcredit, statistics and evolution
- Main actors of the microfinancing sector, both at international level and in Spain
- Social impact of microfinancing
- Challenges or the microfinancing sector
Topic 3. Social Crowdfunding
- The concept of crowdfunding, statistics and evolution
- Main actors of the crowdfunding sector
- Different types of crowdfunding
Topic 4. Social Venture Capital
- Tools of Social VC
- Evolution of the Social VC sector
- Main actors of the sector
- Challenges of Social VCs
Evaluation systems and criteria
In person
The evaluation of competencies achievement will be assessed taking into account the course deliverables, class participation, attendance of conferences and master classes, and the final exam.
Evaluation structure:
- Class engagement: 10%
- Attendance of and participation in conferences and master classes: 10%
- Deliverables – case studies solutions done in groups of 3 to 5 students: 40%
- Final exam: 40%
Bibliography and resources
Bastida, R. and Mas-Machuca, M. (Ed.). New tendencies in the creation and management of social business, Yunus Social Business Network Barcelona, 2018. Available to download here: https://www.sbcbarcelona.org/que-fem/#estudis-publicacions
Defourny, Jacques; Hulgard, Lars & Pestoff, Victor (2014), Social Enterprise and the Third Sector. Changing European Landscapes in a Comparative Perspective. Routledge. London.
Mertens, S. (2010). La gestion des entreprises sociales, Edipro, Liège.
Yunus, M. (2011). Building Social Business: The New Kind of Capitalism that Serves Humanity's Most Pressing Needs Paperback.
Website of the European Comission about Social investment: