Impact Investing Initiative

Impact investing: in pursuit of a positive, measurable social or environmental impact alongside financial returns.

In the last several years, impact investing has emerged as a promising tool for tackling some of the world’s most complex and enduring social problems. These types of investments span across asset classes and occur in both emerging and developed markets. Impact investments are financing diverse efforts throughout the social sector, including education, agriculture, financial services, the environment, and healthcare.

Both a puzzle and a promise, we believe impact investing sits squarely at the intersection of Wharton’s renowned financial expertise and its commitment to social impact.

Wharton’s strong history with financial research and the financial services industry provides a unique opportunity to examine impact investing with the same rigor it has used with other investment tools and strategies.

This multifaceted program advances the science of impact investing by training students—the next generation of investors—to combine financial expertise with an understanding of social problems, change strategies, and impact evaluation.

Members of the Wharton Social Venture Fund pitch to alumni and potential investors at Wharton | San Francisco.

Wharton Social Venture Fellows

The Wharton Social Venture Fellows (WSVF) is a student-led group that sources and conducts diligence on early and expansion-stage companies with venture-grade growth potential and intentional, measurable social impact.

The WSVF looks to:

  1. Support and promote early stage companies that create positive social or environmental impact
  2. Prepare students to become leaders in the impact investment community, where sound investment principles are applied to complex social and environmental problems

Each year, the WSVF (formerly known as the Wharton Social Venture Fund) selects first-year Wharton students based on commitment, experience, and industry knowledge, and provides high quality training on the investment process, impact investing, and portfolio management. Second-year MBA students become project leaders, charged with managing project workflow and knowledge transfer.

Founded in 2007, the WSVF has focused on companies in education, energy, health and wellness, food and nutrition, environmental sustainability, and financial inclusion. The WSVF also annually competes in the MBA Impact Investing Network & Training Program (MIINT) where it has an impressive track record of success.  Merrill Lynch is the lead sponsor of MIINT for the 2015/2016 academic year, and The Moelis Family Foundation is the founding sponsor of the MIINT.

Impact Investing Research

Despite increased awareness around impact investing, the industry remains a nascent field, often limited to specialized, niche players.  While impact investing is gaining traction in practice, the industry faces a major hurdle in attracting significant investment from large institutional investors.

In traditional investment practices, academics have conducted rigorous, reliable research on financial performance, and the resulting evidence base is used extensively by large institutional investors in the development of their portfolio strategies. The impact investing industry does not currently enjoy this resource, and there is precious little academic research published on impact investing in top journals. The major barrier to research is a lack of a robust, accessible database of fund and transaction-level performance.

In collaboration with Wharton’s Department of Finance, WSII launched a research project designed to collect and analyze financial performance data on private equity impact investment funds. WSII is committed to creating a robust database for transformational academic scholarship now and for years to come.  Such research can fill critical gaps in knowledge for investors to better assess risk and inform investment strategies in impact investing.

The first event in the Capital for Social Impact Series was held in Palo Alto, California in October 2014.

The first event in the Capital for Social Impact Series was held in Palo Alto, California in October 2014.

“Capital for Social Impact” Series

The Capital for Social Impact series provides Wharton and Penn alumni with a trusted platform through which they can explore the topic of impact investing. WSII is hosting events around the world, focused on how innovative finance tools can be used to make a positive social or environmental impact.

WSII takes an interdisciplinary approach to examining topics such as risk and externalities, impact investing in philanthropy (e.g., mission- and program-related investments), industry- and sector-specific topics, and mainstream investing.

The series explores both the current state of impact investing activities (Impact Investing 1.0) and the next stages for investing in social impact. WSII also looks at how individuals and organizations can implement and assess impact investing strategies in their own work and how the field can play a valuable role in building resilient communities, including a strong civil society and sustainable global economy.

This year, WSII is producing the Capital for Social Impact series with support from the Rockefeller Foundation.

Students teams pitching at the 2015 MIINT Finals on April 18, 2015.

Students teams pitching at the 2015 MIINT Finals on April 18, 2015.

MBA Impact Investing Network & Training

Building on Wharton’s experience with the Wharton Social Venture Fellows, the Wharton Social Impact Initiative co-produces the MBA Impact Investing Network & Training Program (MIINT) with its founding organization, Bridges Ventures. With the support of Wharton faculty and prominent practitioners from around the globe, MIINT provides students with both theoretical and hands-on experience with the impact investment process.

In this annual program and competition, MIINT engages approximately 200 students from top business schools, including Wharton, Harvard, Stanford, Columbia, Ross, Kellogg, Haas, Booth, Darden, Goizueta and University of Utah, to source and conduct diligence on early stage impact investments and present them to an Investment Committee of leading venture capital professionals.

Student teams from each of the participating schools then present their final analysis and selection in a culminating competition at the University of Pennsylvania each spring. The company presented by the winning student team wins an investment of up to $50,000, which is made by an individual independent investor and subject to independent review.  Merrill Lynch is the lead sponsor of MIINT for the 2015/2016 academic year, and The Moelis Family Foundation is the founding sponsor of the MIINT.

Bank of America Merrill Lynch is a proud sponsor of the 2015/2016 competition.

Wharton Business Plan Competition: Social Impact Prize

The Wharton Business Plan Competition (WBPC) is an annual platform for student entrepreneurs to develop and launch their businesses and compete for more than $115,000 in cash and prizes.

The competition includes a $10,000 social impact prize, accessible to any business plan incorporating social impact.  The 2014 social impact prize winner was Dana Cita, a business focused on bridging the education financing and employment gaps for youth in Indonesia.

Started in 1998 by the Wharton Entrepreneurship Club, WBPC is a global leader in university-run business plan competitions. The competition is open to all students at the University of Pennsylvania, and since its inception, has launched a number of successful companies – including the boutique eyewear company Warby Parker and Saleroads, the nation’s leading B2B appointment and lead generation provider.

Impact Investing Advisory Council

WSII relies on an Impact Investing Advisory Council comprised of dedicated professionals and thought leaders in the Impact Investing space. This council provides expert insight on impact investing focus areas and helps to shape the goals and direction of this effort.

Council members include:

  • Neil Blumenthal, Warby Parker
  • Suzanne Biegel, Catalyst at Large; Senior Advisor, ClearlySo; Vice Chair, Confluence Philanthropy
  • Chris Geczy, The Wharton School
  • Jacob Gray, Wharton Social Impact Initiative
  • Bart Houlihan, B Laboratories
  • Katherine Klein, The Wharton School
  • Ron Moelis, LM Partners
  • Wayne Silby, Calvert Foundation
  • Brian Trelstad, Bridges Ventures.