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). As of October 1, 2019, OPIC became the US
International Development Finance Corporation (DFC), a new agency that will
consolidate the capabilities of OPIC and USAID’s Development Credit Authority.).

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.

The Launching the MicroBuild Fund case study is organized in the form of modules
that can be taught in a law school classroom or in a Master of Business
Administration (MBA)/Master of Public Administration (MPA) classroom. Accordingly,
the learning objectives listed below include some that are common to all students
and others that are relevant solely to law students or MBA/MPA students, as noted.

• Evaluate the opportunities and challenges of catalyzing and blending multiple
  types of capital when launching a pioneering impact investment fund
  [common to all students]
• Examine key legal, policy and business issues raised by launching an impact
  investment fund that addresses multiple shareholders’ expectations relative
  to social impact and financial performance
  [common to all students]
• Identify key contractual provisions aimed at mitigating risks and aligning
  interests of multiple parties to an impact investment fund that operates in
  emerging markets
  [for law students]
• Assess whether an impact investment fund’s social impact metrics are
  appropriate to the fund’s theory of change
  [for MBA and MPA students]

Download