Interested in this fund?
Log in or create an account to request more information.

Gain a deeper and comprehensive understanding of how this fund generates positive impact in the themes and SDGs that matter to you, with insights provided by our dedicated team of expert analysts, and receive notifications about new available impact products, exciting investment opportunities, and relevant updates in the world of impact investing.

Impact Factoring Fund

United States of America

Last updated 13 May 2020, by Impactyield.

Edit this fund

The Impact Factoring Fund (IFF) is a working capital investment fund designed and managed by Invested Development. The central mission of the IFF is to provide flexible working capital to early-stage social enterprises in emerging markets. Venture debt investments in the IFF are a complimentary alternative to equity investments and provide opportunities for investors to achieve near-term risk adjusted returns while creating social impact.



Financial description

The IFF (the Factor) sources and purchases receivables at a discount in structured tranches from select enterprises (the Sellers) according to terms and conditions set forth in a Master Sale & Assignment Agreement (MS&AA). After the sale, the enterprise collects scheduled payments from its customers, and remits payment to the IFF as agreed upon in the terms.
In the quarters following the purchase of the accounts receivable, the enterprise collects customer payments and pays the IFF for the accounts that have been factored. IFF then reinvests the returned capital into more accounts receivable. This provides additional working capital for the enterprise without calling new capital from the investor. Surplus proceeds after fees and loss reserves can be recycled or shared with investors on a participation basis to maintain mission alignment.
Once the full amount of committed capital has been deployed (usually after 1.5 to 2.5 years), the IFF can continue to purchase accounts receivable from the enterprise through the following year using only funds from repayments and no new capital calls from the investor.

12 years

of track record

2012

the year funded

25,000,000 USD

AUM

Interested in this fund?
Log in or create an account to request more information.

Gain a deeper and comprehensive understanding of how this fund generates positive impact in the themes and SDGs that matter to you, with insights provided by our dedicated team of expert analysts, and receive notifications about new available impact products, exciting investment opportunities, and relevant updates in the world of impact investing.

Asset manager

SDG goals

SDG targets

Promote policies to support job creation and growing enterprises

Increase access to financial services and markets

Key performance indicators

Fund overview

Asset manager: Invested Development

Product track record: Fund has 12 years of track record

Target IRR: 6%

Committed Capital: 425,000 USD (US Dollar)

Target return category: Risk-adjusted market-rate of return

Fund domicile:

Product status:

Style/Stage:

Inception year: 2012

Vintage year: 2013

Target region: ,

Target close date: n.a.

Product term: n.a.

Assets under management: 25,000,000 USD (US Dollar)

Investment size: Min: 1,000,000; Max: 5,000,000; Avg: 3,000,000

Co-investment policy:

Currency of investments:

Currency for fund / product figures:

Fund investments to date: 1

Fund investments to date exited or repaid: 0

Management fee: n.a.

Carried interest: n.a.

Hurdle rate: n.a.

GIIN Investors' Council Investment: No

Limited Partners / Investors: n.a.

Limited Partner / Investor Type: Development Finance Institution (DFI), Family Office, Other Institutional Investors

Contact

E-mail: info@investeddevelopment.com

Website: http://investeddevelopment.com/

Phone number: (303) 875-7268

If you wish to have your details removed from this database please email gdpr@impactyield.com


Alex Bashian

Investment Manager

Lee Carter

Analyst

Impact Performance

n.a.

Impact thesis

In the last decade, credit from commercial banks has only marginally improved the working capital funding problem for small and growing business (SGBs) in (most) emerging markets. While specialized lenders have been relatively successful in supplying traditional credit to micro-enterprises and later stage companies, deployment of working capital for SGBs has been lackluster. In many emerging markets, credit from commercial banks is unaffordable, inflexible, or unavailable. Where credit is available, cost of capital typically puts increased pressure on cash flows and depresses balance sheets. The IFF works with early-stage companies in emerging markets to solve this problem – while offering investors an attractive and unique venture debt opportunity.
Through the use of factoring and invoice discounting techniques, the IFF helps SGBs leverage existing but often under-utilized assets, create a more continuous sales cycle, and accelerate growth. Receivables purchasing and invoice discounting are common types of financial transactions, but have seen limited applications for SGBs in emerging markets. By leveraging its experience in early-stage impact investing in emerging markets, the IFF gathers unique market intelligence on well-managed companies and dramatically reduces overall investment risk.
The IFF’s focus on receivables also helps SGBs stay focused on customers, sales, operational efficiency, and holistic business practices with emphasis on ESG performance.

Impact Management

n.a.