Blended Value Investing: Capital Opportunities for Social and Environmental Impact
This paper explores how blended value investing (BVI) can leverage economic performance while creating social and/or environmental value within a unified approach to investing and capital finance. It examines innovation in debt finance and presents cases in which credit guarantees and enhancements have been used to manage risk.
The paper presents private equity investing innovations, which provide risk capital to new funds and enterprises that generate both social/environmental impacts as well as economic value and returns. It also identifies several areas of research that would help advance the field of BVI. These are:
- In-depth survey of BVI, which would ultimately segment the market and identify strategic investor groups and categories;
- Understanding how investors have applied modern portfolio theory concepts and analytics to building diversified blended value portfolios;
- Deeper inquiry into applying lessons learned from microfinance to other blended value systems.
The paper concludes by presenting a strategic vision for the blended value capital markets, and suggests specific steps that participants might take in moving toward this goal.
