Publication

Trailblazers in Impact Interview Series: Marcel Neutel, C4D Partners

Marcel Neutel is the Managing Partner and Chief Investment Officer at Capital 4 Development (C4D) Partners. C4D has been a partner of IIX for over five years and recipient of the 2016 IIX Trailblazer Award. To date, C4D has made four investments in high-impact enterprises via Impact Partners.

We sat down with Marcel Neutel for an interview on his experience as an impact investor. See what he had to say:

1.    Tell us about yourself and how you came to join C4D Partners.

I am Dutch and have always had a strong interest to work internationally and solve complex business issues in developing and emerging markets. I started working in private equity in Central Africa when the impact investment term was not yet coined. At that time, I could say my work revolved around impact investing without me really knowing it.

It was only a few years later that I came across a job opening as an impact investor at ICCO Foundation, a leading NGO in the Netherlands. Joining the investment arm of the foundation from day one with my partner, we witnessed first-hand the rise of the impact investing eco-system and have been running a global impact fund investing in SMEs worldwide for the last 5 years.

ICCO Foundation’s fund later became an independent impact investing unit with Capital 4 Development (C4D) Partners as an independent fund manager. At the end of 2018, we raised $30 million USD from various investors for our C4D Asia Fund.

2.    What is your investment thesis and which sectors/markets are you looking at closely?

C4D typically looks at innovative growth stage SMEs which bring positive social, environmental and economic change to the lives of marginalized communities. We aim to contribute to inclusive local economies by supporting SME companies that address and solve for local challenges and/or industry inefficiencies. We also integrate a gender lens in our investment strategy and aim to invest at least 30 percent of our capital in women-led or women-owned SMEs.

Currently, we cover three countries through the Asia Fund, namely India, the Philippines and Indonesia. In India, we usually support (Pre) Series A funding in established companies as we find the market to be relatively developed.

The approach in Southeast Asia has been a bit different. As we find the market to be more nascent and still developing compared to India, we have adopted more of a (debt) mezzanine investment approach.

In both types of investments, we are an active partner and support the company’s growth going forward so as to attract future investments.

3.    What do you look for when deciding to invest in an impact enterprise? What are your key growth metrics?

First and foremost, we look at companies that achieve high social and environmental impact. Once we believe in the impact they are trying to achieve, we look at the company’s management team. We need to believe in the team’s capabilities and determination to feel confident in the growth of the company.

4.    What does your post-investment strategy entail?

Following an investment in an impact enterprise, C4D adopts the role of a typical fund manager. In equity deals, this entails continually providing support through our representation on the board, but we can also have positions on the board for mezzanine debt deals.

Additionally, we also provide what we term an ‘investee support facility’. This is a separate facility of grant money which we use to co-finance support  to our investees to enable them to strengthen specific areas in the company such as human resources, conduct market studies, coach entrepreneurs, improve management information system, etc.

5.    What would you advise new investors in navigating impact investing?

The first advice that comes to mind if talking to other investors would be the importance of having a local presence to build closer relationships with the entrepreneurs.

It is crucial to be able to provide close-up support and investors should really ask themselves if they are the most effective partner or if there are any local partners on the ground that may be better for the enterprise.

At C4D we have seen both of these realities by being both a global fund while also having a growing local presence in the countries we work in.

6.    What would you advise impact enterprises when they are raising capital?

As an investor, we appreciate knowing the whole story of an enterprise’s creation and like companies to explain how the whole project came to life. For example, how did the idea start? When raising capital, companies should share how their ideas and business models have evolved and improved over time.

7.     What convinced you to invest in Green Enterprises?

At the end of 2018, we invested in organic virgin coconut oil producer Green Enterprises because we thought they were generating deep impact through all levels of their work.

We felt that Green Enterprises had a strong and committed management team with potential to scale by serving both a domestic market in Indonesia while also being able to expand globally. Overall, Green Enterprises’ triple bottom line approach and strong potential for growth was very attractive to us.

8.     What has it been it like working with IIX?

I have had a very good experience working with IIX so far. We have worked together since the start of our first fund – both with our India team and our Southeast Asia team – and really found IIX’s pre-investment work to be effective and of high-quality. We are looking forward to continue and expand our cooperation with IIX in the next decade.

If you are an accredited investor or entrepreneur of a high-impact enterprise, we invite you to register as a member of Impact Partners. Click Here to Register

Additionally, please feel free to contact Impact Partners at impactpartners@iixglobal.com with any direct inquiries you may have .

 

Women, Peace and Parity: Speech at Wharton San Francisco

The following speech was delivered by IIX Founder and CEO Professor Durreen Shahnaz on October 24th at Wharton San Francisco, for IIX and Knowledge@Wharton’s event “Women, Peace and Parity: Using Finance as a Tool For Progress.”

Ladies and Gentlemen, Welcome to Knowledge@Wharton and IIX’s joint event, ‘Women, Peace and Parity’. Thank you all for joining us today to celebrate the United Nations – so Happy United Nations Day. Today is a celebration of women — the Sustainable Development Goals #5 – Gender Equality, a celebration of Peace – SDG goal # 16, and a celebration of partnerships – SDG #17, because as we know, to undertake the mammoth task of creating a peaceful and equitable society – it takes women and it takes a village.

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IIX Impact Snapshot, Q3 2018

Highlights from the Q3 Impact Snapshot:

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What’s the Big Risk?

Coming from a corporate fortune 500 setting, I will be the first to admit that I typically fall into the trap of looking at the same standard criteria when assessing the feasibility of a new social impact investment program [i]:  market need, market size, business model, financial model and strategic fit. Don’t get me wrong, a lot of effort and intelligence goes into developing each of the above.

However, after attending the IIX Impact Institute Executive Certificate Program: Financing the SDGs, I came to realize one large blind spot:  Risk.

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Innovative Finance for Sustainable Peace: Speech at 72nd UN General Assembly

The following speech was delivered at the 72nd United Nations General Assembly by IIX founder Durreen Shahnaz to launch the Innovative Finance for Sustainable Peace Initiative. The 5-year initiative leverages the power of financial markets to unlock $1 billion to drive forward sustainable peacebuilding efforts across the globe by creating systemic social-economic resilience.

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When Philanthropy Meets Innovative Finance: Opportunities for Foundations in Gender Lens Investing

Innovative finance is emerging as a powerful tool for harnessing private sector capital to advance gender equality and women’s empowerment but remains limited in its scale to date due to challenges inherent in innovation. Philanthropic actors can help overcome these barriers and play a catalytic role in enabling innovative finance to reach its true potential in creating gendered impact. Using three case studies of innovative financial mechanisms that are applying a gender lens across Asia, Impact Investment Exchange (IIX) illustrates how innovative finance can create gendered impact and how philanthropic actors can use their resources to support the development of such funding mechanisms.

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IIX Impact Snapshot, Q1 2018

Highlights from the Q1 Impact Snapshot:

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IIX Annual Report 2017

 

 

Highlights from the 2017 Annual Report:

  • IIX launched the first-of-its-kind Women’s Livelihood Bond (WLB)™ on the Singapore Exchange
  • Impact Partners, IIX’s investment crowdfunding platform, closed its 40th deal, raising a total of $28 million
  • The award-winning IIX ACTS accelerator program supported by USAID completed its first round, delivering over $7 million of investment capital to 16 high-impact enterprises in Asia

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IIX Impact Snapshot, October 2017

Highlights from the October Impact Snapshot:

  • “IIX ACTS participant SolarHome, a Singapore-based clean energy enterprise, has closed a pre-Series A round…”
  • “Investors from IIX’s Impact Partners platform who invested in India-based enterprise Kinara Capital achieved an exit this month…”
  • “IIX completes a successful three-year run of its award-winning IIX ACTS program with support from USAID, impacting over 4.4 million…”

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Beyond India: The Next Frontier for Impact Investing in Asia

The recent McKinsey & Company report ‘Impact Investing Finds its Place in India’ is an interesting read with some valid insights on impact investing in India. However, having been in the impact investing space in India for more than a decade, I have witnessed the pendulum of impact investing swinging away from India towards other high-potential countries of South and South East Asia and believe it is time to zoom into the new frontier markets which have proven strong economic growth with high impact potential.

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