Institute for Sustainable Investing
Feb 27, 2019

The Challenge: Devise a Novel Financial Instrument to Help Improve the World

Twelve teams of graduate students are named as finalists in the 2019 Kellogg-Morgan Stanley Sustainable Investing Challenge.

Each year, Northwestern University’s Kellogg School of Management and Morgan Stanley's Institute for Sustainable Investing invite graduate students from around the world to submit ideas for innovative financing and investment vehicles that help address critical environmental, social and governance issues.

Now in its ninth year, the Kellogg-Morgan Stanley Sustainable Investing Challenge invites teams of graduate students to propose a creative financial solution that helps address one or more of these issues, while aiming to provide competitive market returns to private-sector investors.

This year, 109 teams from around the world submitted proposals that seek to improve everything from plastics recycling in Vietnam to economic inclusion for transgender people in India. Twelve finalist teams have been chosen to present their ideas at Morgan Stanley’s Hong Kong offices on April 12^th, and the winning team will receive $10,000.

This year’s competition drew more interest than ever: A total of 365 students from 80 graduate schools submitted investment prospectuses targeting sustainability and impact challenges in 31 countries. The growth in overall proposals submitted and the breadth of the problems they aim to address underscores that a new generation of investment leaders view finance as a critical tool for helping solve global challenges.

PROPOSED PROJECTS IN	FROM ACROSS	BASED IN
0	0	0
COUNTRIES	SCHOOLS	COUNTRIES


TOTAL OF	FORMING	NARROWED TO
0	0	0
STUDENTS	TEAMS	FINALISTS

The Finalists

First round judges weighed each proposal on its merits
and selected these 12 finalist teams:

CSRi: A Fixed-Income Pay-for-Impact Fund

Proposal: Pay-for-impact fixed income fund designed to help corporations enhance measurable impact of corporate sustainability.
School: New York University, Stern School of Business; New York University, Wagner School of Public Service

DoubleUp ADU-Backed Securities

Proposal: Collateralized debt obligation that aims to help unlock liquidity for the construction of accessory dwelling units(ADUs), increasing availability of affordable housing in tight real estate markets.
School: University of California Berkeley, Haas School of Business; University of California Berkeley, College of Environmental Design; Columbia University, Columbia Business School

Fund for the Rehabilitation of Australian Mines and Environment (FRAME)

Proposal: Up-front financing of mine sites to decrease risk of process and economic disruption, and help ensure environmental remediation.
School: University of Chicago, Booth School of Business

Grey to Green Fund (G2G)

Proposal: Multi-asset fund seeking to help reduce water consumption by acting as a market aggregator for hotel greywater infrastructure.
School: Johns Hopkins University, School of Advanced International Studies; Columbia University, School of International and Public Affairs; Duke University, Nicholas School of the Environment; Massachusetts Institute of Technology, School of Humanities Arts and Social Sciences

Humana Support Bank

Proposal: Micro-credit to help support the integration of Venezuelan refugees into the Colombian economy through job growth.
School: ESADE Business School

Indian Smart Solar Muni+ Fund

Proposal: Levered private equity fund designed to help improve air quality and increase renewable energy use by bundling municipal debt earmarked for solar projects.
School: Tufts University, The Fletcher School of Law and Diplomacy

Omega: Combat Climate Change with Bayannur

Proposal: Tax equity and convertible debt to help support improved air quality through investments in biofuel plants.
School: Peking University, HSBC Business School

Sort it Out Recycling Fund

Proposal: Revolving loan fund providing supply chain financing to help grow China’s circular economy.
School: Yale University, School of Forestry and Environmental Studies; Yale University, School of Management

Sustainable Livelihoods Opportunity Fund

Proposal: Galvanizing opportunity zone investments to help bring sustainable forest products manufacturing to rural communities.
School: University of California Berkeley, Haas School of Business

The Carbon Yield Fund

Proposal: Debt financing to help provide farmers advance access to capital generated through carbon credits and bridge access to organic marketplace returns.
School: Northwestern University, Kellogg School of Management

The Krishak Development Fund

Proposal: Infrastructure fund directing investments to reservoir projects to help increase crop yields and improve rural farmer’s income.
School: Singapore Management University

Utility Wildfire Resilience Bonds

Proposal: Outcome-based securities for microgrid development in wildfire-prone areas to help limit impact of power outages and enable de-energization.
School: University of California Los Angeles, Anderson School of Management; University of California Los Angeles, Institute of the Environment and Sustainability

This material was published on February 27, 2019 and has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the Morgan Stanley Research Department and is not a Research Report as defined under FINRA regulations. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. LLC (collectively, "Morgan Stanley"), Members SIPC, recommend that recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transaction. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.

This material contains forward-looking statements and there can be no guarantee that they will come to pass. Information contained herein is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of Morgan Stanley. References to third parties contained herein should not be considered a solicitation on behalf of or an endorsement of those entities by Morgan Stanley.

The returns on a portfolio consisting primarily of sustainable investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because sustainability criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria.

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The Challenge: Devise a Novel Financial Instrument to Help Improve the World

Twelve teams of graduate students are named as finalists in the 2019 Kellogg-Morgan Stanley Sustainable Investing Challenge.