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Compete

The Kellogg-Morgan Stanley Sustainable Investing Challenge seeks to identify outstanding proposals offering novel investment strategies to meet some of the most pressing global challenges ahead. 

 

Why Compete?

 

There are many competitions that focus on social entrepreneurship or early-stage investments. The Kellogg-Morgan Stanley Sustainable Investing Challenge is different in that it focuses on scalable solutions created by finance.

The Sustainable Investing Challenge asks you to consider finance and investment tools as a means to create impact on their own, and is one of the few ways for students to gain experience and get feedback crafting real proposals that fit into this critical and growing field.

If you are interested in making finance a force for good, or using finance to leverage impact, this is the competition for you.

Guidelines

 

The Kellogg-Morgan Stanley Sustainable Investing Challenge seeks to identify outstanding proposals offering novel investment strategies to meet some of the most pressing global challenges ahead. As the world’s population approaches 9 billion people by the year 2050, the challenge of meeting human demand for scarce global resources will intensify.

 

Finance has a key role to play in meeting this challenge. Moreover, an increasing number of institutional investors are seeking sustainable investment opportunities for their portfolios. Specifically, these investors seek to identify investment strategies that can meet the financial needs of their organizations by investing in funds, investment vehicles, or direct investments that are consistent with the principles of sustainability and impact.

 

Teams are encouraged to think beyond social enterprises, venture capital fund vehicles and strategies. This competition requires you to propose and defend a sustainable impact investment strategy that uses finance and investment tools to create an innovative solution to an environmental or societal challenge.

 

Integral to this competition are first, that you are creating a financial vehicle, and second, that your financial vehicle will have social and/or environmental impact.

The Kellogg-Morgan Stanley Sustainable Investing Challenge is looking for innovative investment ideas that balance the tension between financial and social return, rather than sacrifice either priority. There is no limitation on asset class or investment vehicle, and teams are encouraged to think creatively. The focus is on investment vehicles and fund strategies versus companies.

 

Eligibility

  • Teams are limited to a maximum of four (4) members.

  • All team members must be currently enrolled in a graduate program at the time of the prospectus submission. Undergraduate students are not eligible.

  • Your team may include members from different graduate schools.

  • All ideas must be the original ideas of the team members.

  • As part of the Morgan Stanley Plastic Waste Resolution to prevent, reduce and remove 50 million metric tons of plastics waste from the environment, proposals that seek to address the issue of plastic waste will be eligible for an additional prize of $5,000.

 

Prospectus Requirements

Two-page prospectuses must be submitted in February. The prospectus should outline a unique sustainable investment strategy. The judges and selection committees are familiar with the broad area of sustainable investing, so avoid overemphasizing general observations about this section of the market. 

All prospectuses are required to have the following elements. These elements are the essentials of a competitive entry. Please review carefully, as failure to include any of the following will significantly reduce your competitiveness.

Format

  • 2-page maximum, no cover page, no identifying information

Structure

  • Investment thesis

  • Fund size, investment size, and investment criteria

  • Diagram of fund or instrument

  • Asset class and capital structure

Target

  • Target geography

  • Size of addressable market

  • Estimate of scalability

​Financial Model

  • Fees and incentives

  • Target investor pool(s)

  • Due diligence process

  • Returns and cash flows

  • If model must require philanthropic capital or concessionary returns, include proposed path to market rate returns

  • Time horizon

Impact

  • Environmental or social impact thesis

  • Metrics to measure impact

Who should my prospectus target for investment?

Institutions seeking investment opportunities may include, but are not limited to:

  • University Endowments

  • Retirement and Pension Funds

  • Family Foundations

  • Family Offices

The proposal must be a fit for an institutional investor who is seeking:

  • Both competitive returns and positive social and/or environmental impact

  • Risk management that is commensurate with the target returns

  • Transparent performance metrics for both the financial and social return

  • Clear linkage between program outcomes and social impact

The institutions are open to multiple asset classes, including but not limited to:

  • Private equity/venture capital

  • Real assets

  • Public equities

  • Fixed income securities

  • Microfinance lending and investing

  • Social impact bonds

Judging Criteria

 

25%

Creativity & Financial Innovation
  • Has the team proposed an innovative investment vehicle that is designed to drive both returns and impact? We are looking for either:

    • An innovative financial structure or

    • A known investment approach applied creatively to a problem previously outside the scope or reach of a social or environmental challenge

  • What’s interesting about this project? Is it just like a dozen others or truly innovative?

  • Does the proposal have a unique capital structure, e.g., including different forms of capital, employing diverse types of institutional investors?

  • Does the proposal uncover new ways to drive returns, a new asset class, or a new cash flow or value stream?

25%

Impact and scale
  • Does this provide a scalable solution that can mobilize sufficient capital and forge significant environmental or human impact?

  • Are there specific metrics for impact? Is the impact real and persistent?

  • Does the impact derived from the proposed approach stem from the financial levers rather than ancillary charitable remains?

  • Has the team demonstrated diligence in defining and projecting impact to be derived?

25%

Feasibility
  • Does the investment thesis seem plausible?

  • Are there real sources of risk-adjusted market rate returns here? (even if considering a gestation period with concessionary returns)

  • Could you see institutional investors responding to and funding this?

  • Was the thesis thoroughly researched and is there strong evidence of financial depth that incorporates the overall economy?

20%

Quality of due diligence and financials
  • How thorough and deep is the research on the thesis?

  • Do the returns and cash flow projections hold water? Has the team demonstrated strong financial logic and validity of key financial assumptions?

  • Have the key investment questions relating to returns, asset quality, underwriting, and risk management (both market-based and non-market) been identified and addressed?

  • Does the team have the skills needed to execute?  Have they defined the skills needed on the investment team?

  • Are the proposed fees and incentives reasonable?

5%

Presentation
  • Has the team been clear, compelling, and concise with their proposal?

  • For the final event: Have all team members participated in either the original presentation or Q&A?

Request a Mentor

Has your idea progressed to the point where you would like feedback? Mentor requests are open!

We pair teams with mentors who can give you advice and direction as you move from idea outline to polished prospectus. Matching can sometimes take a few weeks, so please be patient. Fill out the form linked here to request your mentor now:

Submit

 

Check back in December or sign up for alerts to be notified when the submission portal opens!

 

The submission portal will open in early December and remain open through February 20th. 

When the submission portal is open, you will find links to the submission form both here and on the home page.