NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, December 14, 2016

How do you increase the odds you are going to make money off a social-impact investment?

Curt LaBelle, managing partner at the Global Health Investment Fund (GHIF), a $108 million private-investment fund structured by J.P. Morgan Chase and the Bill & Melinda Gates Foundation, says the key is to look for companies producing high-volume, low-cost products, mostly in health, education, agriculture, and renewable energy.

That is also a smart way to invest in a social-impact fund, he says. Review the fund’s investment portfolio, to see if the firms it is investing in sell high-volume products. “If they develop products that are in demand, inexpensive, and easy to use, then the volumes can be really large” he says. And that, ultimately, will translate into fast-growing revenues and returns. LaBelle is worth listening to. He is barred from publicly disclosing the private vehicle’s results, but says that GHIF, founded in 2012, has outperformed public indexes.

GHIF, has, for example, invested in companies like EuBiologics Co., a vaccine manufacturer from South Korea. The firm recently developed an oral cholera vaccine, which is hard to come by in developing countries.