san francisco 353 sacramento street, suite 740 san francisco, ca 94111 p: 415.982.5045 | new york...

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SAN FRANCI 353 Sacramento Street, Suite San Francisco, CA 94 P: 415.982.5045 | www.imprintcap. YORK Avenue of the Americas, 3rd Floor York, NY 415.982.5045 | www.imprintcap.com Impact Investing and Health

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SAN FRANCISCO353 Sacramento Street, Suite 740

San Francisco, CA 94111P: 415.982.5045 | www.imprintcap.com

NEW YORK 641 Avenue of the Americas, 3rd FloorNewYork, NYP: 415.982.5045 | www.imprintcap.com

Impact Investing and Health

This report has been prepared by Imprint Capital Advisors (“Imprint”) based upon the information provided to Imprint by the firms described herein, as well as from public sources that Imprint believes to be reliable, but such information has not been independently verified by Imprint. Imprint makes no representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of such information, nor does Imprint accept any liability arising from its use or for any analysis or assessment derived therefrom. This report is not intended to constitute an offer of securities of any of the firms that are described in the report. When applicable, investors should completely review all of a firm’s offering materials before considering an investment in a firm.

Investment advisory services are provided by Imprint Capital, a SEC registered investment advisor. Advisory services are subject to advisory fees as disclosed on Form ADV. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended or undertaken by Imprint Capital) or product made reference to directly or indirectly by Imprint Capital, will be profitable or equal the corresponding indicated performance level(s) shown. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment portfolio.

The clients in this case study have been selected as representative institutions and individuals engaged in impact investments, inclusion was not based on performance criteria. The clients do not endorse Imprint Capital Advisors, LLC or any of its affiliates or of any service provided by the Investment Adviser or any of its affiliates.

The companies, advisors and any securities identified and described herein do not represent all of all companies, advisors or securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the companies or securities identified was or will be profitable. Past performance of third party advisers and securities may not be indicative of future results.

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Disclaimer.

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Agenda

II. Understanding and navigating the alphabet soup

III. Increasingly diverse set of allies – an illustration

IV. How to get started

V. Your questions (and maybe even some answers)

I. A bit about me, a bit about you

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Introductions

□ Me/Imprint – why am I here?□ You – why are you here?

5

Navigating the Alphabet Soup

Socially responsible investing (SRI): “Investments designed to avoid or mitigate

negative social and environmental impacts”

Impact investing: “Investment activity designed to have a positive impact on social

or environmental issues” Program related investing

Environment, social and

governance (ESG)

Mission investing

Sustainable investing

Ethical investing

Blended value

Double/triple bottom line

Social venture

investing

Venture philanthrop

y

Mission-related investing

Values investing

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Sifting through the diversity

Why: MotivationsWhat: Priority issues

Basic taxonomy of approaches

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Different rationales for impact investing

Impact investing

Values alignment

Use more resources for

impact

Use the right resources for

impact

Find, support, and learn about

enterprise models for

impact

RANGE OF SEGMENTS

HEALTHCARE

• Healthcare delivery• IT and admin• Supplying care (drugs, devices & diagnostics)• Organizing and optimizing care

• Family economic security• Community infrastructure• Environmental health

• Food and nutrition• Fitness• Wellcare

WELLNESS

SOCIALDETERMINANTS

OF HEALTH

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ENVIRONMENTAL HEALTH

COMMUNITYINFRASTRUCTURE

FAMILYECONOMICSECURITY

SOCIAL DETERMINANTS

Public Transportati

on

AirQuality

Safe Sidewalk

s & Trails

GreenProduc

ts

Access to Financial Services

SmallBusinessSupport

AffordableHousing

CareerLadder

s

Green Built Environme

nt

Transit-Oriented

Development

Workplace Safety

HEALTH CARE

WELLNESS

Community

FacilitiesSocial Service

s

Inclusive Insurance

Childcare

“WELLCARE”

FOOD &NUTRITION

FITNESS

WELLNESS

SchoolPhysEd

Exer-gaming

BabyFood

s

HEALTH CARE

Fitness & Recreation Centers

Play-space

Community

Groceries

Local FoodInfrastruct

ure

School

Food UrbanFarmin

g

Virtual Coachin

gRemote

Monitoring

Peer Groups

Direct-to-

PatientOutreac

h

Health Media

Mobile Fitness Apps

Mobile Food Apps

Employer

WellnessProgram

s

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IT & ADMINDRUGS,

DEVICES &DIAGNOSTICS

ORGANIZING& OPTIMIZING

DELIVERYOF CARE

HEALTHCARE

Telemedicine

Resource

Allocation

Billing &

Payment

HIEs

EMRs

RetailClinics

Mobile Diagnosti

cs

FQHCs &Safety

NetClinics

HealthcareWorkforce

Self-Health

Low-Cost

D,D&D

Case & Care

Management

Drug Compliance &

Delivery

Kiosks

Mobile Vans

Scheduling & Back-Office

Risk & Data

Analysis

Workforce Optimizatio

n

Decision-Support

Dental Care

Home Care

Specialty

Clinics

Hospitals & Med

Centers

Simulations &

Gaming

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Impact on Risk & Return?

Negative

A limited universe intrinsically reduces return expectations

New field and managers equals more risk

You cannot effectively manage to multiple bottom lines

Positive

Environmental & social drivers are material to business

Growing market opportunities (e.g. Clean Tech)

Can reduce risk (see BP) and is a sign of strong management

There is significant theology on both sides of this question

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Risk/Return: Impact vs. Non Impact Managers

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Screening Statistics

Negative Screens - eliminate companies involved in:Estimated Tracking

Error (%)*

Estimated Incremental Risk (%)

(Standard Deviation)*Tobacco 0.50 0.01Weapons and Firearms 0.41 0.00‘Filthy Fifteen’ 0.12 0.00All Carbon 0.60 0.01

Positive Screens - emphasize companies with better:Environmental Record 0.85 0.02Corporate Governance 0.85 0.02

Environmental Revenue20% 1.00 0.0230% 1.37 0.0540% 1.82 0.0850% 2.58 0.17

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Mix of approaches

Engagement

Community

Enterprise

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Portfolio example

Engagement

Community

Enterprise

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Allies – conventional and otherwise

□Other people in this room!□Community foundations□Strategics/corporates□Jobs and community oriented funders

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Healthcare as employment engine: by the numbers

Today: 16.8M jobs, in 784k companies

2020: +5.7M jobs (half from growth, half age-out replacement)

Why healthcare? ‘Cause that’s where the jobs are…

Growth segments: ACO’s, managed care, home health, residential

Size of growth: 1.3M home aides, .5M orderlies & clerks, .7M nurses

Median wages: $20-30k / year; nurses $65k / year

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Three tiers of healthcare business models:Seeking non-fungibility of labor

-1

0

+1

Better jobs = better health = better business

Neutral models

Negative models – abusive to labor

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Business models as driver of health (or not!)

ProfitGood Jobs

Cost

Quality

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Now that they’re sorted, what to do? Investing approaches by tier

-1

0

+1

Better jobs = better health = better business

Neutral models

Abusive models

1. Develop and scale aligned models for direct impact and demonstration2. Build market share - Support broader transition to aligned models

1. Develop clearer ways to identify better practitioners2. Build business case for better practice

3. Develop levers to support better practice

1. Avoid – screen out2. Shine spotlight on negative practice

3. Identify “better” version of presumed abusive models

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Where/how people get stuck

• Actively stuck: Stakeholder divergence– “Theology” of returns for SRI [negligible financial impact]– Concern about competing with grant-making– Questions about deal flow

• Passively stuck– Overwhelmed/challenge identifying entry point– Question of “how” – sourcing, execution and

management

Learnings and observations

• Diversity of ways to use investments to drive impact• Context matters – your organization and your goals should drive

many of the tools and approaches• Be proactive in the marketplace – drives good practice and

multiple returns• Use or build your strengths – knowledge, networks and capacity

you have or want to build• Seek, manage and measure what matters – thesis driven approach• Don’t create disincentives• Importance of internal leadership• Action learning – avoid abstract debates• Be smart about leveraging partners – intermediaries, peer

organizations and other allies

What to do

How you do it

How you get started

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Creating a program: Getting to an investment policy statement

Mission Objectives

Financial Parameters

Context

Investment Policy

Identify target areas and role of investment capital – key impact driver? Complement philanthropy? Support interests more broadly?

Integrate with financial management – current assets, anticipated expenditures/inflows, liquidity needs, and risk tolerances

Determine the level and nature of involvement of various stakeholders; interests, biases, priorities and concerns

ObjectivesAllocations (targets and bands/limits)Investment processDecision-making and governanceFinancial and mission reporting

Observations□ The context drives the right approach – there is no one size fits all approach□ Thoughtful, deliberate execution is critical to success of any mission investing

program□ Finding a clear entry point is critical – you can’t answer all of the questions on the

drawing board□ Leveraging/intersecting with existing strong processes can be important□ Investing is investing – it is difficult to do well and takes discipline and care

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