Launching the MicroBuild Fund
Summary
This Launching the MicroBuild Fund case study focuses on the creation of a blended finance facility that was sponsored by Habitat for Humanity International to attract funding into housing microfinance on a global scale. The fund – called the MicroBuild Fund – is a demonstration fund. The primary protagonist in this case is the nonprofit organization, Habitat for Humanity International. The case study focuses on Habitat’s decision to sponsor the launch of its first impact investment fund – the MicroBuild Fund, and the structuring and documentation issues Habitat confronted as it blended capital from a variety of actors. Secondary points of view include other significant, early investors in the MicroBuild Fund – including in particular the Omidyar Network (ON) (equity from a private foundation) and the Overseas Private Investment Corporation (OPIC)* (debt from the US Government’s development finance institution (DFI)).
The case study starts on the day that OPIC is expected to sign its loan agreement with the MicroBuild Fund. The story is told from the point of view of a senior manager at Habitat for Humanity (Patrick Kelley), who was instrumental in conceiving this fund and getting the various parties to join in the fund’s launch. As Patrick waits for the signing of the OPIC Loan Agreement to occur, he reflects on the long road that it took to get to this point. In particular, he reviews the challenges that arose as he and his colleagues worked to convince the Board of Habitat for Humanity to agree to sponsor this fund and then attract a variety of sources of funding into this impact investment fund (US government, high net worth individuals, fund manager, foundation). The case study ends with the press release announcing the launch and funding by OPIC.
This case study is the first in a forthcoming series of case studies that map the life of a single impact investment fund over a decade – from its launch to winding up. This longitudinal approach to creating a series of case studies about the same impact investment fund will offer the field an opportunity to see how an impact investment fund must adapt and change to respond to opportunities and challenges over its life. This case study also is presented from a multidisciplinary point of view, braiding together legal, business and policy issues that surrounded the launch of the MicroBuild Fund.
*Effective January 2, 2020, OPIC is now operating as the U.S. International Development Finance Corporation (“DFC”).
The excerpt contains sampling from the case study.
Disclaimer: This case was written by Katy Yang with research support from Simone Shaheen, under the guidance of Deborah Burand, Associate Professor of Clinical Law at NYU School of Law, and Scott Taitel, Clinical Professor of Public Service at the NYU Wagner Graduate School of Public Service. This case was prepared as the basis for discussion and is not intended to serve as an endorsement, a source of primary data, or an illustration of effective or ineffective management. The case does not consitute, and must not be relied or acted upon as, legal advice. Readers should seek individual advice from qualified legal or financial counsel in relation to their specific circumstances.
For Professional Educators
Teaching Notes
Teaching notes for the Launching the MicroBuild Fund case study will be available free of charge to educators in early 2020. Educators need to request access or sign in as a registered educator to gain access to these teaching materials.
The teaching notes provide instructors with a blueprint for teaching and adapting the case study to the needs and expertise of their intended audiences. In keeping with the multidisciplinary focus of this case study, the teaching notes are designed as standalone modules that emphasize issues of interest to specific disciplines (law and business/policy).
