The University of Cape Town’s Graduate School of Business has launched a new legal course focusing on impact investment – a first for South Africa.
Impact investing refers to investments made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.
“Impact investment is growing at a rapid pace, both globally and in South Africa, and as more international funding becomes available with demands for better social and environmental as well as financial returns, there will be a need for legal expertise to craft the kind of agreements and deals that will ensure these outcomes are realised,” said Dr Susan de Witt, course convenor on the programme.
According to the business school, the Global Steering Group for Impact Investing (GSG) predicts that $3 trillion will be invested globally in high impact assets by 2030, and the South African National Task Force for Impact Investing, which is part of the GSG, has been tasked with accelerating the growth of the market in South Africa specifically.
A recently-published African Investing for Impact Barometer showed that almost $30 billion in financial assets on the African continent is already invested in impact, with 57 South African fund managers claiming to do so.
“And the industry is growing. The recent announcement by President Cyril Ramaphosa that he wants to attract $100 billion worth of investment for the country – for economic growth, job creation and social development – is a case in point,” it said.
The course will range from direct investments into profit-with-purpose businesses, to blended capital investments into infrastructure projects, to social impact bonds.
“Drafting agreements and making deals in the field of impact investment is slightly different to traditional investment agreements and is the responsibility of lawyers as well as fund managers, bankers, asset consultants etc,” de Witt said.
“They need to determine not only financial returns but also how social and environmental impact can be effected and measured. This requires a very specific skill-set that professionals around the world need to learn, practise and improve on to ensure that as much investment is made as efficiently and effectively as possible.”