Acumen share pioneering investment philosophy with Bartlett PhD students

18 December 2017Bartlett News

Bartlett School of Construction and Project Management PhD Candidate Imad Ahmed reports on a talk from Mr Farrukh Khan of Acumen.

Following dinner in the Great Hall of Goodenough College, Acumen’s Chief Business Development Officer Mr Farrukh Khan retired with Masters and PhD students, faculty and innovators to the Churchill Room to deliver an engaging Port Talk on impact investing the Acumen way.

The guiding premise behind Acumen’s work is that catalysing entrepreneurship will help end poverty, Mr Khan told his audience. It was thus that Acumen pioneered the patient capital approach with its growth capital investments, to bridge the gap between financial returns and social return. This has allowed Acumen to impact the lives of 232 million people since 2001 across 99 companies with USD 108 million of investments. Acumen’s investments have further catalysed USD 522 million follow-on commercial capital.

Mr Khan delved into Acumen’s partnership with D.Light to highlight Acumen’s commitment to its investees. In 2008, Acumen invested an initial USD 1 million equity in the solar home system vendor. Despite early hiccups and relatively low initial social returns – D.Light reached 200,000 lives – Acumen believed in the D.Light’s team and business model and invested approximately 60% of its initial tranche in 2010 in yet more equity. It invested a similar amount two years later in equity, USD 1.8 million two years after that in debt and equity and a further million dollars in 2015 as convertible debt. With each round, D.Light’s impact grew exponentially, culminating in 68 million lives reached by the last.

Agriculture and healthcare make up 60% of Acumen’s portfolio, energy accounts for a fifth, and housing, water and sanitation and education together account for another fifth. Regionally, its investments are spread between Pakistan and India, East and West Africa, Latin America and, more recently, the USA.

Mr Khan’s easy manner elicited a high level of participation. Students buzzed with questions. Mr Khan reassured the audience that Acumen’s commitment to its investees did not mean that it discouraged competition – Acumen is invested across approximately 20 solar home system companies. Pressed for what sort of financial return Acumen’s portfolio yields, Mr Khan answered 1x. The audience departed grateful to Mr Khan for a stimulating evening.

The Port Talk was organised by UCL Bartlett School of Construction and Project Management PhD student Imad Ahmed, who is looking at the political economy of rural infrastructure investments in Africa.

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