Governance Structures

All Finance in Motion’s impact investment funds are characterized by an effective governance structure, at the center of which stands the Board of Directors, who manage the funds. The board is usually composed of 5–8 seasoned development finance professionals who have been nominated by the main investors, foremost among which are the international finance institutions and internationally operating development banks.

Actual investment decisions, which require more frequent deliberation, are made by an Investment Committee (often 3–4 members), which is nominated by the respective fund, based on detailed investment proposals and memos compiled by Finance in Motion and other service providers.

For some impact investment funds, there is also an Advisory Group, which usually consists of senior decision-makers from the central banks or supervisory entities for financial markets in the target countries. The group's role is to support strategic decision-making by the board and serve in an advisory capacity with respect to critical issues.

In case a fund deals with local currency shares, which serve as a risk mitigation tool for fluctuations of FX rates in exotic currencies, the FX Committee - composed of external experts - decides upon Finance in Motion’s recommendations. In order not to deplete this FX risk buffer, each interest rate for a loan in local currency has to factor in a likely devaluation effect from the exposure. Such “extra interest charge” is credited to the local currency shares in addition to their regular compensation.

The Technical Assistance Committee usually consists of a minimum of three delegates from the donor agencies that contributed to the Technical Assistance Facilities. The committee supervises the activities of the technical assistance facility, which always goes hand in hand with each of Finance in Motion’s development finance funds.

As required by the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF), impact investment funds are also supported by a wide range of service providers, including a custodian, administrative agent, and auditor.