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The Challenge Deliverable: The Prospectus

Two-page prospectuses must be submitted in February. The prospectus should outline a unique sustainable investment strategy. The judges and selection committees are familiar with the broad area of sustainable investing, so avoid overemphasizing general observations about this section of the market. 

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All prospectuses are required to have the following elements. These elements are the essentials of a competitive entry. Please review carefully, as failure to include any of the following will significantly reduce your competitiveness.

​Format

  • 2-page maximum, no cover page, no identifying information

Structure

  • Investment thesis

  • Fund size, investment size, and investment criteria

  • Diagram of fund or instrument

  • Asset class and capital structure

Target

  • Target geography

  • Size of addressable market

  • Estimate of scalability ​

​Financial Model

  • Fees and incentives

  • Target investor pool(s)

  • Due diligence process

  • Returns and cash flows

  • If model must require philanthropic capital or concessionary returns, include proposed path to market rate returns

  • Time horizon

Impact

  • Environmental or social impact thesis

  • Metrics to measure impact

Who should my prospectus target for investment?

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Institutions seeking investment opportunities may include, but are not limited to:

  • University Endowments

  • Retirement and Pension Funds

  • Family Foundations

  • Family Offices

The proposal must be a fit for an institutional investor who is seeking:

  • Both competitive returns and positive social and/or environmental impact

  • Risk management that is commensurate with the target returns

  • Transparent performance metrics for both the financial and social return

  • Clear linkage between program outcomes and social impact

The institutions are open to multiple asset classes, including but not limited to:

  • Private equity/venture capital

  • Real assets

  • Public equities

  • Fixed income securities

  • Microfinance lending and investing

  • Private credit

  • Social impact bonds

Judging Criteria

25%

Creativity & Financial Innovation

  • Has the team proposed an innovative investment vehicle that is designed to drive both returns and impact? We are looking for either:

    • An innovative financial structure or

    • A known investment approach applied creatively to a problem previously outside the scope or reach of a social or environmental challenge

  • What’s interesting about this project? Is it just like a dozen others or truly innovative?

  • Does the proposal have a unique capital structure, e.g., including different forms of capital, employing diverse types of institutional investors?

  • Does the proposal uncover new ways to drive returns, a new asset class, or a new cash flow or value stream?

25%

Impact and scale

  • Does this provide a scalable solution that can mobilize sufficient capital and forge significant environmental or human impact?

  • Are there specific metrics for impact? Is the impact real and persistent?

  • Does the impact derived from the proposed approach stem from the financial levers rather than ancillary charitable remains?

  • Has the team demonstrated diligence in defining and projecting impact to be derived?

25%

Feasibility

  • Does the investment thesis seem plausible?

  • Are there real sources of risk-adjusted market rate returns here? (even if considering a gestation period with concessionary returns)

  • Could you see institutional investors responding to and funding this?

  • Was the thesis thoroughly researched and is there strong evidence of financial depth that incorporates the overall economy?

20%

Quality of due diligence and financials

  • How thorough and deep is the research on the thesis?

  • Do the returns and cash flow projections hold water? Has the team demonstrated strong financial logic and validity of key financial assumptions?

  • Have the key investment questions relating to returns, asset quality, underwriting, and risk management (both market-based and non-market) been identified and addressed?

  • Does the team have the skills needed to execute?  Have they defined the skills needed on the investment team?

  • Are the proposed fees and incentives reasonable?

5%

Presentation

  • Has the team been clear, compelling, and concise with their proposal?

  • For the final event: Have all team members participated in either the original presentation or Q&A?

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