Impact Investing/Social Sector Finance

Impact Investing/Social Sector Finance

Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and/or environmental impact in addition to a financial return. Impact investing occurs across asset classes, for example private equity / venture capital, debt and fixed income. Recognizing the power of impact investments (as opposed to traditional not-for-profit grant making or purely for profit investing), it is now well accepted that the number of funds engaged in impact investing could grow from its present $60 billion or so in assets to $500 billion in assets within the next decade. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances. Orrick's Impact Investing and Social Sector Finance team represents companies (for profit, not-for-profit and hybrids) who are making investments intended to create positive impact beyond financial return, and as such, make a positive social and/or environmental impact through their activities.

Organizations engaged in impact investing and the broader social sector often face difficult or complex legal issues.  Orrick is proud to be one of the few law firms that operates in this space. Our lawyers, located in offices throughout Asia, Europe and North America and bolstered by our strong corporate and finance practices, provide a wide range of legal services to entities involved in the impact investing and social sector finance space.  

We advise on a wide range of transactions, including structured finance, fund formation, contracts, banking law, securities law, foreign exchange regulations, local laws and regulations, employment law, tax law and the structuring and governance of not-for-profit organizations.  If a matter requires knowledge of a local jurisdiction in which we are not present, we draw on our large network of local counsel in countries around the world.

Key Impact Investing/SSF Sectors Covered by Orrick

Why Orrick?

Our long-standing work in the impact investing and social sector finance space has allowed us to leverage and expand our knowledge and capabilities as well as develop relationships with for profit organizations, non-governmental organizations and governmental agencies involved in the impact investing and SSF sectors. To this end, we actively support cross-sector collaboration and public-private partnerships.

Orrick has strong capabilities in areas important to clients operating in the impact investing and social sector space:

  • Debt finance
  • M&A
  • IPO advisory services
  • Peer-to-peer (P2P) and related online micro-lending platforms
  • Intellectual property
  • Labor and employment
  • Regulatory advice
  • Venture capital and private equity
  • Investment funds
  • Renewable energy
  • Tax ​

We support the broad, social goal of our clients in raising the quality of life for people in every part of the world.  The poorest communities, without access to basic financial and social services, are in particular need of financing and employment opportunities, affordable housing, education and health care, clean water and water sanitation technology and investment in clean and renewable energy. Our clients are regularly featured in such publications as the Wall Street Journal, the New York Times and the Economist.  Representative examples of our work in each of our SSF sectors are as follows:

Microfinance.  We have helped establish microfinance institutions (MFIs); helped form private equity funds that invest in MFIs; advised an online program that connects investors with MFIs; advised a nonprofit that subsidizes MFIs on transactions and structured finance; analyzed foreign exchange risk issues; and reviewed microlending regulatory schemes in over two dozen jurisdictions.

Education.  We are representing a student lender that offers private education loans to high-quality graduate students at better terms than are offered by the federal government as it scales to fund its originations through the issuance of public debt.

Health.  We are representing our impact investing client in connection with a medical credit fund that is providing debt capital to health clinics in Sub Saharan Africa (“SSA”).  SSA accounts for 11% of the world’s population, bears 24% of the global disease burden, 44% of the world’s communicable diseases, and commands less than 1% of the global health expenditure.  The primary objective of the fund is to enable low-income people in SSA to access affordable quality healthcare services. 

Housing.  We are working with one of the largest international development organizations to structure an innovative, community-led REIT investment opportunity for low-income members in the United States that includes a public-private partnership with a major metropolitan City.  The program is expected to facilitate direct small investments by low income individuals into commercial property in their own neighborhood, providing an alternative to traditional industrial development agency financing and other savings/wealth building programs and, at the same time, addressing issues related to gentrification and community investment.

Water and sanitation.  We serve as outside counsel for a prominent not-for-profit organization that works to improve water supply and sanitation for poor communities around the world and has an innovative water credit program that draws on microfinance principles to deliver money for water projects that impact those without access to safe water.

Energy.   Representing a web-based platform for individuals to invest in solar energy projects, for a business concept similar to other crowdfunding sites like our client Kiva, but with a focus on funding solar energy installations and applications, particularly in rural areas of developing countries where people lack access to electricity. Providing legal services in establishing the legal entity, including advising on the new hybrid corporate forms, international lending and foreign currency restrictions, securities regulations and consumer protection laws, and solar project finance.

  • Social Sector Finance Brochure
  • Mainstreaming Impact Finance

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