Practical Tips and Considerations for Preparing PE Impact Investment Fund Offering Documents

Private equity (PE) sponsors are increasingly aware that they can attract investors while contributing to the greater social good by offering impact investment strategies. Adequately addressing impact investment considerations in offering documents allows sponsors to accomplish this by conveying their credibility to prospective investors. Given the relatively new and evolving nature of impact investing, however, the challenge for PE sponsors is to prepare impact investment offering documents that are legally and commercially appropriate. In a guest article, Ellen Kaye Fleishhacker and Reginald C. Young, partner and associate, respectively, at Arnold & Porter offer a practical guide to PE sponsors for addressing these impact investing considerations in their offering documents, which includes setting forth clear criteria for selecting and diligencing investments; a sound approach to measuring impact; and policies for navigating and addressing potential conflicts and risk. See “A Guide to Pre- and Post-Investment ESG Considerations and Due Diligence” (May 7, 2019); and our two-part series on environmental, social or governance (ESG) factors in fund investing: “Past, Present and Future” (Nov. 10, 2016); and “Designing an ESG Investing Policy” (Nov. 17, 2016). To further explore this topic, on Wednesday, June 12, 2019, at 2:00 p.m. EDT, the Private Equity Law Report will host a complimentary webinar discussing impact investing. The webinar, entitled “Current Issues and Trends in Impact Investing,” will be moderated by Rorie A. Norton, Editor of the Private Equity Law Report, and will feature Fleishhacker; Raúl Pomares, founder and managing director of Sonen Capital LLC; and Christine Looney, deputy director of the mission investments team at the Ford Foundation. To register for the webinar, click here.

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