Call for Evidence

Investment for development: The UK’s strategy towards Development Finance Institutions


Submission by


Incofin Investment Management NV

Date: 3rd February 2023



What due diligence does BII undertake prior to making investment decisions and how does this compare with best practice?


  1. BII made a commitment to India Progress Fund-I, managed by Incofin India Investment Management Private Limited, a subsidiary of Incofin Investment Management NV.
  2. Incofin Investment Management NV is a leading impact fund manager regulated by the FSMA with its registered office in Antwerp, Belgium
  3. The India Progress Fund is an impact fund focussed on investments in India in the agri-food supply chain and financial inclusion
  4. BII has made a commitment of USD 15mn to the Fund in June 2021
  5. BII conducted an extensive due diligence in the run up to the commitment. We found the interactions constructive and adding value to the fund setup and strategy.
  6. The BII team must be commended for conducting the due diligence during the Covid pandemic and for swift changes to adjust their diligence approach
  7. The due diligence particularly on the Environment, Social (E&S) and Business Integrity (BI) side was extensive and added a lot of value in creation of the E&S and BI Policy. A detailed E&S and BI Action Plan was created and included as part of the Shareholders Agreement.
  8. BII also engaged deeply on the investment strategy and the prior track record of the team to assess suitability in execution of the investment strategy
  9. BII engaged a third party consulting on review the operating procedures of the fund, which helped benchmark the fund manager against global peers and also allowed for several efficiency and risk mitigation related initiatives, which have added value to the investment manager platform
  10. BII has advised the Fund to appoint two years after Final Closing an external ESG consultant to assess the Fund’s ESG (including business integrity) performance. We expect this to further help quantify the impact of our investments.


How effectively does BII manage funds following its initial investment?


  1. Multiple personnel from BII have been engaged in adding value to the fund following BII’s commitment
  2. Senior investment professional from BII has joined the Investor Advisory Board, which provides strategic guidance on fund management and governance. The stewardship by BII, given the diverse experience of investments in funds across multiple countries is highly relevant and adds value
  3. The BII teams for Environment, Social (E&S) and Business Integrity (BI) are separately in touch providing guidance on latest best practises on these topics and also tracking progress against the E&S and BI Action Plans agreed at the time of initial investment
  4. BII has a well-established system of monitoring and evaluation that helps it ensure that its investments are performing as expected and achieving their intended development impact. The organization also has a strong focus on portfolio management, including risk management and diversification, to maximize the development impact of its investments while minimizing the risks to its portfolio.
  5. Additionally, BII has a team of experienced investment professionals and extensive networks in the private sector, which allows it to provide ongoing support to its portfolio companies and help them achieve their business and development goals.
  6. Further, BII has been instrumental in organising a host of pro-bono training programs on a variety of E&S topics for our investment professionals and also for our portfolio companies’ senior management
  7. Overall, BII's approach to fund management has been highly effective in ensuring the sustainable development of the countries and communities in which it invests. BII's commitment to transparency, accountability, and best practices in impact investing has made it a leading institution in this field.


How does BII evaluate the impact of its investments?


  1. Setting Expectations: BII sets clear expectations for the impact it aims to achieve through its investments, which are aligned with its environmental and social policies and the Sustainable Development Goals (SDGs).
  2. Monitoring and Reporting: BII closely monitors the environmental and social performance of its investments and requires its investee companies to report on their progress towards meeting the expectations set for them. This includes conducting periodic assessments, such as environmental and social impact assessments, and monitoring progress on key performance indicators. The BII team is regularly in touch with us to discuss a variety of impact related topics.


  1. Evaluating Outcomes: BII evaluates the outcomes of its investments by measuring the extent to which they have achieved their intended impact, such as reducing greenhouse gas emissions, improving working conditions, and promoting access to basic services.


  1. Targets for IPF: In the case of IPF investment outcomes expected and targets have been captured in an Impact Development Monitoring Plan. The key impact criterion agreed are:



These impact targets have been backed with detailed targets using a BII created template. Based on our experience based on regular interaction with the BII team, we are of the view BII that has a deep understanding of impact and a committed approach to delivering impact. We feel that BII should push the impact agenda forward even more strongly given its leadership position and the demonstration effect of BII leading to ‘crowding-in’ of investment from other sources.





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