Why investors are excited about the Women’s Livelihood Bond Series – and why family offices should listen
In recent months, investors have been doubling down on sustainability, as sustainability products continue to outperform the market during COVID-19. One such example has caught the eye of even the most skeptical of investors – the IIX Women’s Livelihood Bond Series (WLB Series).
The US$150 million WLB Series are a series of high yield debt securities that finance a portfolio of women-focused SMEs in Asia Pacific, and will help to create sustainable livelihoods for 3 million underserved women. In 2017, IIX made history by launching the US$8.5 million Women’s Livelihoods Bond 1 (WLB 1), the world’s first gender-lens, impact investing security listed on a stock exchange and quoted on Bloomberg (ISIN: XS1476571614). Building on this success, in Q1 2020 IIX issued the $12 million WLB 2.
Investors in the Women’s Livelihood Bond Series – a range of accredited investors across Australia, Hong Kong, Singapore, Switzerland, the United States, and the United Kingdom—have been earning financial returns, even during a global economic meltdown. But why is this the case?
Let’s explore a couple of reasons:
- An eye to long-term impact: As the world’s first gender lens social bond certified by the International Capital Markets Association (ICMA), the Women’s Livelihood Bond Series was an early mover on creating a portfolio of borrowers that report on a range of social and environmental data points, and have strategies in place to listen and adapt to their stakeholders’ needs. In the case of the WLB Series, these included non-market linked stakeholders like smallholder farmers and microentrepreneurs who continued to serve poor communities, pay back loans, and generate returns for investors during the economic downturn.
- COVID-Resilience: In a globally connected world, investors have realized the importance of critical sectors for global economic recovery. The WLB Serie includes SMEs that are COVID-19 responsive (by being a part of the solution in responding to the outbreak), resilient (critical to the community to survive and thrive during and post COVID), and resistant (industries insulated from COVID disruption).
- Diversification strategy: Investors enjoy the benefits of the world’s only multi-country, multi-sector, inclusive debt security. As the markets reel from broken supply chains, closed borders, and unprecedented regulatory changes, the WLB provides investors with diversification of risk across countries, sectors, and borrowers.
- Listed security: By creating the first impact investing security in the world to be listed on a stock exchange (the Singapore Exchange), the WLB Series is paving the way for more liquid financial securities in the future and improved transparency for investors. The WLB Series reports both social and financial performance on a semi-annual basis.
- Risk-Return-Impact: By addressing the three dimensions of risk-return-impact for investors, IIX created a COVID-resilient financial instrument that delivers stable returns and sustainable impact to investors. Investors enjoy several layers of risk-mitigation, including a 50% pari-passu guarantee from the United States government agency, USAID, as well as first loss capital.
By creating a smart portfolio that generates social and financial return, the Women’s Livelihood Bond Series has been winning global awards from the UN Global Climate Action Award to the Financial Times Innovative Lawyers Asia-Pacific Award, to The Asian Banker’s Best Impact Bond Series Award. As investors come around to the sustainability dividend, it turns out that being business smart means being socially and environmentally smart.
For enquiries or more information, please reach out to IIX at [email protected].