Pacific Community Ventures

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Measuring the Social and Environmental Impacts of
Private Equity Investments Meeting the
ChallengesExamples from the Field December 11,
2007
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Agenda

• Why measure social return?
• Brief Introduction to Pacific Community Ventures
• Measuring SROI on Private Equity
• ExampleCalPERS California Initiative
• Process
• Challenges/Solutions
• For more information

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Financial return is primary.
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Why measure social return?

• Public pension funds
• Are your ETIs producing benefits in your
  geography? If not, why bother? How do you know?
• Are you having a bigger impact in your state than
  you know?
• Third party fund managers
• Demonstrating specific, measurable community
  benefits alongside competitive financial returns
  is a compelling competitive advantagewill
  attract more capital.
• All investors who care about social outcomes
• Show that you are producing competitive financial
  return AND significant social returnit can be
  done!
• What you measure, you can increase.

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60 million under management
Capacity building for small businesses
Asset-building for lower income workers

• PCVs portfolio
• Consulting clients
• Pension Funds
• 3rd-Party Mgrs
• Foundations

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Example CalPERS California Initiative

• 975 million ETI
• 475 million allocated in 2001, 10 funds, 100
  companies
• 500 million allocated in 2006, committed to
  third-party fund-of-funds manager.
• Objectives
• To earn attractive risk-adjusted returns
• As an ancillary benefit, to have a meaningful
  impact on the economic infrastructure of
  Californias underserved communities. To invest
  in companies
• Located in areas where access to institutional
  capital is limited
• That employ workers who reside in economically
  disadvantaged areas
• With female and/or minority management or
  ownership

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CalPERS California InitiativeNon-Financial
Outcomes

• PCV conducts an annual evaluation of the
  non-financial outcomes for the entire 975
  million commitment.

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Results Providing capital to areas that
historically had limited access to institutional
equity capital.
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Results Employing workers living in
economically disadvantaged areas
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Results Supporting women and minority
entrepreneurs and managers
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Data Categories

• Varies with client objectives
• Hourly and salaried wages
• Job quality
• Health insurance
• Asset-building
• Training
• Opportunities for advancement
• Employee tenure
• Patents
• In-state and minority supplier relationships
• Community and environmental initiatives
• Corporate philanthropy

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Measuring the California Initiatives Community
Outcomes--Process

• Identify key metricsthe yardsticks
• Develop survey instruments
• Work through the funds to collect data from each
  portfolio company. Very high participation rates
  (90)
• Analyze and compile comparative statistics
• Report
• Conduct annually, beginning in 2005

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Challenges and Solutions
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For More Information
Beth Sirull Director Pacific Community
Ventures 415-442-4315 BSirull_at_pcvmail.org