Amy Wang, WG’12 , G’12,is the Vice President of PG Impact Investments, where she leads Direct Investments. PG Investments is a fund focused on debt, equity and fund investments in the financial inclusion, energy access, affordable housing, health care, education and agriculture sectors.
Previously, Amy has worked across Asia, Africa and Eastern Europe. She received her MBA from Wharton in 2012 along with an MA in International Affairs from the Lauder Institute at the University of Pennsylvania. She recently talked to Megan Foo, W’19, about her experience in social impact investing.
Can you tell us about your interests and professional background in public finance and emerging markets?
Amy Wang: The desire to create tangible value add has consistently played a large role in my career trajectory. This led me to start my career in public finance; I saw the opportunity deliver solutions that had the potential to address social needs. Helping identify investment solutions that help government and municipalities build infrastructure leads to societal benefits for individuals.
While public finance was a definite tool for social gain, I personally felt it was too far removed from direct impact. That desire to get closer to the impact while leveraging skills I learned from being a financial services professional in public led me to join the catalytic new field of impact investing.
Impact investing is an emerging field where investments are made for a dual benefit; positive societal benefit as well as financial return. The emerging markets in particular are an exciting place to investigate impact investing, as many innovative new business models are emerging to tackle some of society’s greatest challenges in those underserved geographies. Companies in those areas are oftentimes undercapitalized and underserved; so I try to understand the unique bespoke risks that these institutions carry, manage the perceived risks and create investor returns while doing so.
How did you come to join PG Impact Investments and what are some key projects you’ve overseen as Vice President?
Amy Wang: Generally, I lead direct investments for PG Impact Investments, leading debt and equity investments into companies. One transaction in particular that’s been interesting and hopefully catalytic for the industry is a special purpose vehicle (SPV) that is going to be collateralized by receivables from rural off-grid consumers in Kenya.
There are businesses that sell and service solar home systems that are affordable to purchase because the systems are coupled with mobile financing plans. The concept seems so simple but it’s really hard when working with these customers because they’ve never had access to credit and aren’t considered credit-worthy. It is very expensive to implement this strategy, particularly when paying for the systems upfront and then getting dribs of payments on an ongoing basis – it takes a while to get the financing plans to recoup the costs.
We’re buying a package of these receivables; creating a structure that understands the unique risk profile of the consumers and prices it in a way that is palatable to the business as well as the investment market. We hope to create a structure that will be replicable for investors and other businesses.
Going forward, what are some of the opportunities and challenges facing public finance?
Amy Wang: Being a professional in the public finance space’s main challenges lie in the fact that the structures that you operate in and the financial engineering you do has become a little more commoditized over time. It has become harder to be competitive as products are similar. A lot of the innovation that occurred a few years ago has stagnated now so it’s challenging becoming more differentiated.
Sometimes you think the pricing and being able to provide the competitive value-add is harder. There’s an opportunity now that’s emerging, which is that people perceive that public finance is a form of impact investing and they are trying to understand how using environmental outcomes and social returns are a KPI for public finance success could be a way to leapfrog that challenge.
What is your advice for individuals interested in transitioning from finance careers to impact investing careers?
Amy Wang: Really understand where your prospectus sits on the “impact” spectrum; this spectrum ranges from pure philanthropy to impact investing, to ESG/responsible investing to traditional finance. Depending on where you sit along the spectrum and where you feel you have the biggest opportunity to provide value, you need to ensure your values are aligned with the mandates of the organization.
Also, it’s important to remain resilient. Impact investing is a thin market so recruiting is hard but one thing that I think is valuable for individuals who want to enter the space is on the ground experience. That can be hard when you’re getting technical with the numbers and analysis, but you don’t actually see what the companies and clients look and feel like on the ground.
If there is the opportunity to go to for example Guatemala to work for an impact accelerator there or work for an actual social enterprise in Kenya, coupled with the financial experience from the banks, it makes you a much more viable candidate.
This interview was conducted as part of the Inspirational Women Series, conducted by Megan Foo, W’19. Read the full story on Megan’s site.
Posted: October 18, 2017