Learning about Impact Investing Strategies

Franziska Schaefermeyer, an Investment Manager, Tengelmann Ventures, will hold the workshop ‘Best Practice from a Corporate VC’ on the Congress on Impact Investing on 24 January 2017.

Franziska Schaefermeyer has been an investment manager with Tengelmann Ventures since 2012. She also co-manages the Impact Investing programme of Tengelmann Social Ventures. Prior to that she had worked in sales and marketing with Materna of Bertelsmann and initiated a business plan competition. Franziska studied Business at the universities of Göttingen and San Sebastián and also holds an MBA from the Berlin School of Economics and Law.

What is important when you plan an internal impact investing strategy?

First of all you have to find out what you want or what the CEO wants. Where does his “social heart” fit into? Is it inclusion, handicapped people, poor living conditions? In what region does the CEO want to invest? More in developed or in undeveloped countries? How much money do you have in order to invest? What is your expectation of the return? All those questions need to be answered internally in order to set up an impact investing strategy. Of course it is necessary to clarify it internally if you want to raise a fund or if you invest from the balance sheet. It is important to involve the legal and tax department. It is very helpful if you talk to experts within this scene and ask for feedback, recommendations and help. Then it is important to answer the question where I get the dealflow from and if you want to do equity or debt investments or both. Make sure that you have the legal experience for that closing the deals. There are some law companies, which are specialized in Impact Investing.

Based on your experiences, what worked out and what failed?

The Impact Investing space is quite new in Germany. It is more established in the US, UK and Nordics. What still does not work in Germany is the acceptance of Impact Investing – that it is a real business if you do this and that you can earn money out of this. In Germany there is a huge lack of the knowledge “what does exactly impact investing mean”. What still works is the network. The people who are in this field are very collaborative and helpful in terms of dealflow and given their experience. Sadly we do not have a great show case in Germany that Impact Investing can be successful. A model like TOMS Shoes is missing in Germany. There are great companies coming up but until now we do not have a big exit of a social business. Still investing very early stage (what we do) emphasize that the fail rate is very high (I would estimate 80%). An Impact Investor who invests early stage needs to be aware of this failure rate.

Which future trends do you see coming?

I see the following trends coming: online education, mobile solutions for refugees, health digitalization and agrar digitalization.