The Fund Impact Rating

What ratings products are available for fund managers?

GIIRS Fund Rating (including three components: Initial Rating, Annual Update Ratings, and Track Record Ratings):

A GIIRS Fund Rating is comprised of an aggregate numerical score and rating for a fund based on a roll-up of the GIIRS Company Impact Ratings for its portfolio investments. In order to receive an Initial Fund Rating, the underlying companies in the portfolio must obtain a Company Impact Rating.

If a fund is still in formation it can obtain a Fund Target Rating as its Initial Fund Rating to assist in the fundraising process. In order to receive a target rating a fund must:

Each year a fund receives an updated rating with current information about the investments in its portfolio. At the close of a fund, funds receive a track record rating, a report summarizing its impact performance over the life of the fund. The fund track record rating is designed to be used by funds when raising a follow-on fund.

GIIRS will begin rating funds in January 2011.

What value does a GIIRS rating create for a fund manager?

GIIRS ratings create value for fund managers in four main ways:

  1. Fundraising and Reporting

    Fund managers can use GIIRS ratings as a tool to raise follow-on funds, to assist portfolio companies with additional capital raising, and to provide industry-standard reporting to investors.

  2. Savings on Due Diligence Costs

    GIIRS ratings can provide your fund with access to data (primarily non-financial) for a target company that has been collected according to a rigorous and transparent set of independent standards. This reduces a fund manager's due diligence costs by:

    • Cutting down on the staff time and money required to collect and standardize data;
    • Freeing-up the investment team to focus on critical investment judgments and determine where further due diligence may be required; and
    • Reducing the burden on entrepreneurs to provide the same data to multiple investors in different forms.

  3. Performance Tracking & Benchmarking

    Fund managers can use the ratings and additional key performance indicators to benchmark the social and environmental impact of a prospective investment relative to the comparable and independent ratings and indicators for similar investment opportunities by industry, geography, fund type, etc. Fund managers can also track the social and environmental performance of their investments on a comparable basis over the investment lifecycle. This provides fund managers with the ability to assess ongoing performance, help portfolio businesses improve performance, and an easy method of reporting on the actual influence they have had in creating impact through their investment and portfolio management process.

  4. Risk Management

    Financial services firms are coming under heightened public scrutiny for their actions, especially in light of the recent financial crisis. GIIRS ratings reduce a fund manager's risk of investing in a company that has significant social and environmental performance risks, prior to investment.

What funds have received GIIRS ratings?

Leading venture capital and private equity firms from the developed and emerging markets are beta testing version 3.0 of the B Impact Ratings System and will receive GIIRS Fund Ratings during the fall of 2010. Learn more about the Pioneer GIIRS funds.

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