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Case Study

From grease to green: Impact investing due diligence on ZhanaSolutions

By Vanina Farber and Shih-Han Huang

18 pages

May 2024

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Reference: IMD-7-2518

Fatbergs and grease waste from industrial kitchens are hardly the most enticing topics for a business school case study. Yet ZhanaSolutions, the start-up examined in this impact investment due diligence case, is all about grease waste. At least, on the surface. When one dredges deeper, the case reveals a compelling story about how to embed impact into decision making. It illustrates the risk, return and impact relationship – specifically, the added-value that impact investors can bring by investing in companies that generate a clear measurable impact, even when the risk-return profile could lead traditional commercial investors who do not consider impact to underappreciate the business opportunity. The ZhanaSolutions case looks at due diligence in the impact investing context. The protagonist, José Lozano, is the Latin American managing director of the Geneva-based impact investor AlphaMundi Group (AMG), an impact first but very commercially minded impact investor that invests in Africa and Latin America. In the case, Lozano and his team have completed the due diligence and are deciding whether to present a positive recommendation to the AMG Investment Committee to invest in ZhanaSolutions, The start-up, headquartered in Bogotá, offers a novel leasing model for its grease removal G-Trap technology to industrial kitchens in Colombia. Students assume the role of Lozano and will need to balance impact and financial considerations as they make a recommendation. Through the case, students can experience a real impact investing due diligence, explore the layers of considerations needed to build a compelling investment case and simulate how best to present proposals to an investment committee. The case underscores the idea that investable opportunities can be found in even the most mundane places.

Learning Objective

Learn to perform due diligence on impact investments and assess their potential for financial returns and positive impact.
Apply practical thinking: Develop problem solving and decision-making capabilities in the context of impact investing due diligence, e.g. synthetizing different information to reach an investment decision and building a robust scenario analysis.
Articulate and construct a clear and compelling impact and financial thesis for potential investments.

Keywords

Social Innovation, Entrepreneurship, Finance, Sustainability, Impact Investment, Due Diligence, Waste Water, Gender Equality, Clean Water, Sanitation, Sustainable City, Sustainable Community, Goal Partnerships

Settings

Latin America, Colombia
AlphaMundi, ZhanaSolutions, Finance and Insurance, Investment Management, Services, Water Supply and Sanitary Services
2022-2023

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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