Oltre Venture: The Impact Revolution (A)

Beccarini, Irene; Herrera, Ángela; Ferraro, Fabrizio; Liechtenstein, Heinrich

Product #:SM-1669-E

Supplier:IESE Publishing

Discipline:General Management

Setting:Europa; Italia, 2016

Details:Case (PDF) • 6 pages • 2018-09-03

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This case describes the start-up and early operation of a novel impact investing firm in Italy: Oltre Venture. Oltre Venture, which defines itself as a "social venture capital" firm, had been among the pioneers of impact investing in Europe, investing ?8 million in its first fund, and raising ?29 million for its second one. Founded by professionals with many years of corporate and private equity experience, Oltre Venture had developed a unique hands-on approach to impact investing, with a clear investment thesis focused on health, education, agriculture, food, housing, and an attention to less developed regions in Italy. The A case describes the history of the fund, provides biographical information on the founders and the management team, and outlines Oltre's operating model. Having successfully managed one fund, and raised a second one, by 2017 Oltre faces two challenges. The first was divesting the investments in the first fund while ensuring that the companies they exited would continue producing positive social impact. The second was to invest the second fund. The A case offers information on two potential deals the investment committee would have to decide on Hydro Food and Home Sweet Home. Hydro Food aimed to build high-tech hydroponic greenhouses to produce fruits and vegetables and sell them to large retailers. Home Sweet Home provided a platform to manage short-term rental apartments. Which one of these projects better fits Oltre's investment criteria and its mission? Which ones should they invest in? This challenge provides an opportunity to reflect on how the investment and impact thesis shapes the investment process. The B case provides an excerpt from the investment committee meeting where these two investments were discussed, and the dialogue among the partners offers an opportunity to appreciate how, through each investment decision, the firm advanced and clarified its own investment thesis.

Learning Objectives

The primary purpose of the case is (a) to develop a general understanding of the challenges of doing impact investing in Europe, and (b) to show how the investment and impact thesis of an impact investing firm is used in practice when deciding where to invest. The case has several teaching objectives: - to understand impact investing, and differentiate it from traditional forms of private equity/venture capital and philanthropy - to discuss the role of the investment thesis and operating model in an impact investing firm - to debate the importance of hands-on investing approaches in impact investing - to understand the unique challenges exit presents for impact investors - to appreciate the trade-offs between financial returns and impact that actual investment opportunities present, and how to address them. The case was prepared for an MBA-level elective class on responsible and impact investment. Therefore, it assumes that students are somewhat familiar with basic private equity investment practices and terminology. Nevertheless, the case and exhibits provide enough information on the impact investing ecosystem to make it appropriate also for courses on sustainability, social entrepreneurship, or even traditional private equity courses interested in shining a light on an emerging trend.