How we make investment decisions
Our process from start to finish
We are impact-led and commercially rigorous, and our investment process includes specialists from both our investment and impact teams.
Making the decision
A prospective deal might be brought to our attention by a sponsor, third party contact, or through direct outreach from British International Investment. If it is initially seen as viable, the deal team, which includes specialists from our investment and impact teams, conducts further research to decide whether it should be put before our Investment Committee.
Our Investment Committee is made up of senior staff from British International Investment, as well as external representatives with an expertise in investing in the regions and sectors where we focus. The Investment Committee process is made up of several stages that a prospective investment must pass through before it is made.
The deal team works closely with the potential investee to carry out due diligence and deal structuring, examine how the prospective investment meets our criteria, and understand the opportunities for impact. This includes producing an ‘Impact Dashboard’ which articulates the development impact that we expect. To complement our detailed assessments of individual investments, we use a tool to help us manage our performance against our strategic impact objectives. It’s called the Impact Score, and is designed to incentivise investments that support our development objectives.
Our process also includes evaluating prospective investees’ environmental, social and governance systems and practices and their commitment to making improvements and adhering to industry good practices. We look for opportunities to maximise impact, with a particular focus on our priorities of ESG, gender equality, climate change and business integrity.
The deal team then presents their findings to our Investment Committee. If the Investment Committee makes the decision to go ahead with the investment, we outline our commitment to the deal sponsors and specify any conditions that need to be fulfilled before the funding is made available.
Following the investment decision, we work with investees to put in place steps identified before the investment to ensure the company or fund is aligned with our standards. These may include an environmental policy and implementation strategy, a business integrity plan, a governance structure, or a strategy to enhance development impact.
We monitor our portfolio on a regular basis. We assess how the company is performing against a range of criteria, including achievement of milestones, risk management, valuation movements, development impact, and environmental, social and governance performance. By tracking performance, we can identify situations where we can add value or intervene.
We understand that it takes time to build a great business so we stand with management teams for the long term. When it’s agreed that we have achieved both our desired financial and developmental objectives and established a clear rationale for exit, including examining how impact will be sustained after exit, we work with investees to ensure a smooth process.