There is US$345 trillion of “investable wealth” globally. When sources of positive social and environmental impact are being held back, the issue is not the amount of capital available, but a lack of the right structures to channel it into the enterprises, projects and intermediaries delivering positive outcomes.

This is particularly true in emerging and underserved markets, where significant pools of capital exist but are often disconnected from local impact opportunities. In Africa, institutional investors hold more than US$2 trillion in assets, but regulatory constraints, risk perception, liquidity requirements and limited investable structures limit where that capital can flow.

Impact vehicles can overcome these barriers. By pooling capital from multiple sources, with varying financial and impact goals, they can move capital towards providers of social and environmental impact.

But impact vehicles can be complex to build, not least because they involve aligning a broad range of stakeholders, while responding to local market realities, governance requirements, and the real or perceived risks that often prevent capital from flowing.

Drawing on work across the 48-country GSG Impact Partnership, this piece lays out six practical steps for building an impact investment vehicle – from identifying market failures to designing financial structures to engaging the right capital providers. Our goal is to give practitioners a replicable framework for getting capital to where it is needed most.

Read the full article at ImpactAlpha: Building an impact investment vehicle, in six steps