Innovative finance advisory in the social impact sector is like a helpful friend who guides projects/companies/not-for-profits/social entrepreneurs, etc. to make he world a better place, finding creative ways to get the funds they need. 🌍💚 Think of it as smart money advice for good causes! These advisors use cool, friendly tactics to connect people and organizations with the resources they need, ensuring projects that help people and the planet can kick off and flourish! 🌿💡 In a nutshell, it’s all about making good things happen with smart money moves! 🌟💰
"Impact finance advisory", "innovative finance advisory" or "blended finance advisory" are often loosely used terms to describe work in the impact sector that resembles the world of investment banking. At its core, these roles share similarities with those of investment banking professionals, involving a mix of consulting skills like presentation, structured thinking, and storytelling, along with fundamental finance skills like deal structuring, financial modeling, cash flow projections, and return forecasting.
For individuals coming from a consulting background, this can be a valuable stepping stone to sharpen their finance skills (the "hard skills") before making a full-fledged transition into buy-side roles in Venture Capital (VC) or Private Equity (PE).
A-Listers : Unitus, KOIS, and Palladium
A-List companies that occasionally work on impact finance: Dalberg and Bridgespan
Other companies : Asha Impact Trust and Desai and Associates
Most of the innovative finance/blended finance deals take at least 4-6 months of feasibility study and structuring. The structuring phase is ideally followed by fundraising phase.
Project 1: Conducting a needs assessment/ feasibility study for a climate smart agriculture blended finance facility in India
Project 2: Structuring an impact fund that invests in early stage healthcare startups across low and middle income countries
Project 3: Structuring an impact bond for providing adolescent sexual and reproductive health services to teenage girls in Kenya
For more information on the kind of projects done by impact fiannce organisations visit - KOIS Project
The designation growth in the focused these organisations looks like the following:
Junior Analyst (at least 1-year experience post-UG ideally consulting)
Senior Analyst (Masters/ and 2 years of experience either in consulting or finance/IB)
Associate
Senior Associate
Manager
Principal
Associate Partner
Partner
Performance reviews are conducted twice a year, and typically most people receive a promotion each year (in case of good performance) up untill Manager level.
Problem-Solving skills: Ability to create an issue tree, hypothesis-driven thinking, ability to validate the hypothesis by conducting desk research and stakeholder interviews and ability to see the big picture and plan strategically, considering long-term implications and various scenarios
Analytical skills: Comfortable with numbers, ability to conduct quantitative analysis, knowledge of basic statistical concepts (UG-level), good at creating effective visualisations (graphs and charts).
Financial skills: Proficient in financial modelling, creating cash flow projections, reading and creating financial statements/projections.
Familiarity with concepts of economics and finance: Knowledge of basic demand and supply, macro-economics concepts like GDP per capita, disposable income, inflation, interest rates and finance concepts related to debt, bonds and equity should be clear.
Technical skills: MS Powerpoint (Intermediate), MS Excel (Intermediate), and MS Word.
If you come from the following background feel free to apply -
Experience working in a consulting organisations/ investment bank/ CA/ CFA at least for 1 year and some basic knowledge of finance and economics (in case of no experience in finance industry)
UG from top colleges of India - DU/ Kolkata colleges/ Mumbai colleges, IITs or UG from top international colleges
MBA from an Indian B-shool or international B-school
Masters in relevant subjects like economics, law and politics or MPA/MPP from international colleges
**Freshers are generally not considered for such jobs.
As an Analyst, your typical workload centers around one project, allowing you to immerse yourself fully in the task at hand. Much of your time is devoted to conducting secondary research, crafting supporting analyses, and presenting your findings, often using tools like presentation decks or Excel.
It's important to mention that individuals typically spend about 80% of their time on projects, with the remaining 20% dedicated to supporting various business development initiatives. However, for senior analysts and associates, the scenario changes. They often handle two projects simultaneously while also providing ad-hoc support for business development activities.
Given the relatively small team sizes, it's common for analysts and associates to take on a variety of ad-hoc tasks. This dynamic, though, comes with a significant level of ownership over your workstreams. Additionally, there may be occasional travel involved in the job, usually accounting for less than 5% of your time.
Associates, on the other hand, are typically responsible for leading entire project workstreams from start to finish. Think of them as both individual contributors and project managers, guiding the analysts in their tasks.
Most firms in the impact space respect your personal time and place great emphasis on work-life balance. Weekends remain yours, free from work obligations, and strive to maintain manageable workdays. You can expect the workload to be lighter at the beginning of a project, gradually becoming more intense as the project approaches completion. Daily work hours range from 6 to 12 hours.
For entry-level analysts, the deal typically includes a fixed component of 12 LPA (Lakhs per annum) plus an additional ~10% of their fixed pay as a performance bonus. (Note: Some firms do not offer any performance bonus).
As for senior analysts, they receive an approximate fixed pay of 18 LPA. Associates, on the other hand, enjoy a fixed pay of around 21 LPA. Moving up the ladder, managers at these firms typically secure a fixed pay of 30 LPA along with an additional performance-linked bonus.
Impact finance advisories have a rigorous and highly selective recruitment process, and it's important to be well-prepared to increase your chances of success. Here's an overview of what you can expect during the selection procedure:
Resume and Cover Letter Screening: Your application will go through an initial screening process. Make sure your resume highlights relevant experiences, achievements, and educational background that align with the consulting industry's expectations. Your cover letter should showcase your passion for problem-solving and strategic thinking.
Assignment: A case study centered around an innovative finance instrument typically entails two key components: crafting a presentation and conducting a financial modeling exercise using Excel. Another task involves the creation of financial statements for a hypothetical company using Excel.
Multiple Rounds of Interviews: Be prepared for 2 to 3 interviews, each lasting around an hour. The majority of the interview time will be spent discussing assignment and fit. The interviewers' hierarchy typically starts with someone one level senior to the position you are applying for and goes up to partners. Interviews evaluate your problem-solving skills, logical thinking, ability to structure complex problems, and communication skills.
If you start as an Analyst or Associate, after two years of experience in an impact finance organization, you can easily pursue options like an MBA/MPA/MPP or transition to roles in venture capital (VC). You could also explore opportunities with development finance institutions (DFIs) such as the World Bank, IFC, US Aid, and more.
Akshita Singh - Analyst at KOIS