Eva Abel is an Investment Manager at Oryx Impact
Oryx Impact is a new impact fund aiming to unlock Africa's growth potential and promote resilient and sustainable societies across the continent. The ultimate impact goal of the fund is to reduce global and regional inequalities as well as displacement and forced migration within and outside of Africa. To achieve these goals, Oryx Impact adopted an impact fund of funds strategy, fostering the impact investment ecosystem in Africa through investing in impact funds led by both emerging and well-established, Private Equity, Venture Capital and Private Debt fund managers, with an emphasis on women-led teams. These funds are in turn expected to support, not only financially, but also with managerial, operational, strategic and impact skills, their investee companies - SMEs, which are the backbone of African economies.
Oryx Impact is currently raising US$ 250 million to invest in 15-20 highly-impactful funds that address at least one of the three following impact objectives: i) economic development and job creation; ii) climate change mitigation and adaptation; iii) gender equality. The fund targets market rate returns, as Oryx Impact believes that only sustainable and profitable business models can generate lasting, positive change and attract much-needed private capital for investment in Africa.
What are your social and environmental impact goals this year?
Our investment strategy pursues ambitious impact goals: economic development and job creation, climate change mitigation and adaptation, and gender equality. We estimate that, through our fund investments, we will create more than 100,000 formal jobs, generate 23,000 GWh of additional clean energy and have more than 2,200 women in senior management positions in Africa. As we are, however, currently still fundraising and not yet deploying capital, we do not have a direct impact on SMEs in Africa. The key impact we generate is from knowledge sharing via our participation in impact-related events, organizations, and various impact initiatives as well as providing fund managers, with whom we engage in an investment process, with detailed feedback and recommendations.
How does your investment team integrate impact goals into your due diligence process?
Impact and ESG are part of our investment process from the initial screening, through due diligence and fund monitoring in the post-investment period. At the screening stage, we have a call with the fund manager focused solely on impact and ESG, which allows us to assess strategic alignment and fulfilment of our fundamental criteria. Before we engage in due diligence with a fund manager, we fill in our impact and ESG scorecard, which helps us identify red flags that may lead to rejecting a potential deal. During the due diligence phase, we carry out an evidence-based impact and ESG maturity analysis through our DD questionnaire, which is filled in by our Impact and ESG Manager, based on discussions with the fund manager and materials provided in their data room. The due diligence report includes a list of recommendations, which are discussed with the fund manager and formulated as an action plan, which the fund manager is obliged to work on post-investment. This action plan becomes part of the portfolio monitoring exercise done on a quarterly basis by Oryx Impact.
Tell us about your approach to measuring and monitoring impact in your portfolio.
We have a set of core impact and ESG metrics, that we ask investee fund managers to report on annually. These metrics stem from our impact objectives of economic development and job creation, climate change mitigation and adaptation, and gender equality. We aggregate this data into an annual impact report that shows our progress towards achieving the impact targets we have set out in the beginning.
In an effort to strengthen the Impact and ESG practice among fund managers, we are currently designing a Technical Assistance (TA) facility, which will be separately funded and managed. The purpose of the TA is to build capacity among emerging fund managers by providing them with the ESG and IMM tools and processes needed to be able to deepen and scale their portfolio’s positive impact on stakeholders.
A big part of our impact and ESG monitoring is the supervision, support and advice throughout the implementation of the action plans previously designed during the due diligence of a fund. The ultimate goal is to achieve the highest possible impact, whilst generating attractive financial returns, and being able to tangibly showcase it.
What impact achievements are you most proud of in your current portfolio?
To date, we have screened more than 220 impact fund managers focused on Africa. Out of these, we have conducted an in-depth screening analysis of approximately 70 funds, which entails honest, detailed feedback and recommendations on best market practices for fund management. During our investment process, we also see many fund managers working towards the improvement of impact and ESG practices. We believe our role as an impact investor is important in driving the entire ecosystem toward more structured and genuine impact investing strategies.
Overall, even though we haven’t started deploying capital yet, it is very uplifting to see most of the fund managers we engage with, have a genuinely impactful mindset and the willingness to become better at impact measurement and management.
How do the AVPA Deal Share Platform and Deal Share Live support your work?
We found the AVPA Deal Share Platform very helpful in identifying potential investee funds for Oryx Impact as well as investors in our fund. It has thus supported our deal flow sourcing and fundraising activities.
