The Brief | May 6, 2024

The Brief: Leadership moment for philanthropic endowments

ImpactAlpha
Photo by Invest Appalachia.
The team at

ImpactAlpha

Greetings Agents of Impact! We’re looking forward to seeing many of you out and about this week. Zuleyma Bebell and I are in Los Angeles for the Milken Institute Global Conference, the national conference of Mission Investors Exchange, and Project Equity’s Employee Ownership Equity Summit. Jessica Pothering is in Bangkok for the Feminist Finance Forum hosted by the UN’s Economic and Social Commission for Asia and the Pacific. Please say hello! – David Bank

In today’s Brief:

  • Mission Investors Exchange pre-brief
  • Impact investing in Appalachia 
  • Hollywood’s ‘inclusion alpha’ opportunity
  • Catalytic pension funds in Asia

Foundation playbook: Leading endowments seek to model diversity, equity and mission alignment. “There has never been a more crucial moment to bring the leading impact investors into one city and one room,” Mission Investors Exchange’s Matt Onek declares in a curtain-raiser for this week’s MIE National Conference in Los Angeles. On stage, the Who’s Who of foundation asset owners and their partners will share how they are incorporating racial equity into investment management, building climate-resilient communities, catalyzing private capital and – slowly – aligning their philanthropic endowments with their philanthropic missions. On the sidelines, conversations at private dinners and after-parties will take up campus protests, threats to democracy, and ways to counter the backlash against ESG and DEI. “MIE is dedicated to empowering our members to deploy more capital for social and environmental good,” Onek writes.

  • AI and impact investing. Omidyar Network, Ford Foundation and Nathan Cummings Foundation recently took small stakes in Anthropic, a competitor to OpenAI. New AI tools must be scrubbed of implicit (and explicit) racial and gender biases. In the coming weeks, shareholders of Alphabet (Google) and Meta (Facebook) will vote on proposals on disinformation and artificial intelligence. And some impact investors are cutting against the doomer narrative with bets on AI to upskill workers and pave the path to good jobs. ImpactAlpha’s David Bank will lead a discussion on “The intersection of impact investing and artificial intelligence,” with Ford Foundation’s Margot Brandenburg, Illumen Capital’s Daryn Dodson, Arjan Schütte of Core Innovation Capital, and Gaurab Bansal of Responsible Innovation Labs, at the MIE conference, this Wednesday at 1:45pm PT. 
  • Leadership moment. On the main stage will be La June Montgomery Tabron of the W.K. Kellogg Foundation, John Palfrey of MacArthur Foundation, Tonya Allen of McKnight Foundation, and Nicole Taylor of Silicon Valley Community Foundation, among other foundation leaders. Expect to see Los Angeles Mayor Karen Bass, along with Mellody Hobson of Ariel Investments, and Jay Brown of Roc Nation and Marcy Venture Partners. Ford Foundation’s Roy Swan will interview filmmaker Ava DuVernay, whose latest film, “Origin,” was produced with investments from Ford as well as Melinda French Gates, Laurene Powell Jobs, and others, modeling a new wave of impact investing in film (for context, see “Shutdown of Participant challenges other investors to drive impact through film”).
  • Keep reading, “Inspiring impact at Mission Investors Exchange 2024 national conference,” by MIE’s Matt Onek on ImpactAlpha.

Dealflow: Place-Based Investing

Invest Appalachia closes $35.5 million to invest in Central Appalachia. The MacArthur Foundation led a new batch of limited partners to help the fund reach a final close. “We have closely followed and admired the design and development of Invest Appalachia, and see it as true leadership in the field of place-based investing,” said MacArthur’s Allison Clark. Other new LPs include Truist Bank, Chordata Capital and the Greater Clarke Foundation. Invest Appalachia, launched in 2022, has deployed over $6 million in flexible and patient loans for local projects and businesses supporting Central Appalachia’s sustainable and economic development (see, “Appalachia emerges as a climate refuge – and its community infrastructure feels the strain”). “Central Appalachian communities are not just dreaming of a just and resilient future – we’re actively building it,” said Invest Appalachia’s Andrew Crosson (see, “Agent of Impact”). 

  • Catalytic portfolio. Although its main fund is closed, Invest Appalachia is still raising capital for a catalytic capital pool to build its pipeline of projects, derisk high-impact deals, and increase investment readiness for entrepreneurs and communities. With over $2.7 million in the pool, Invest Appalachia allocated a recoverable grant to New Roots Community Farm, a land trust that provides fresh food access to low-income residents in West Virginia. It also provided a technical assistance grant to Latina-led Western Women’s Business Center to support entrepreneurs in western North Carolina.
  • Check it out.

S2G Ventures and At One Ventures back Miraterra to help farmers monitor soil health. Healthy soils are critical for food security, farming profitability and carbon sequestration. Vancouver-based Miraterra offers farmers faster, cheaper and cleaner ways to monitor and improve soil health. The company uses a combination of machine learning, sensors and other soil testing equipment. “I’ve searched for six years and assessed more than 50 companies [before] I discovered Miraterra’s ability to see into soil at 1,000x better accuracy than the competition,” said Tom Chi of At One Ventures (see, “At One Ventures closes $375 million deeptech climate fund”). S2G’s Sanjeev Krishnan said Miraterra fills an agtech gap with “consistent, repeatable, cost-effective measurement and insights.” 

  • Agrifood tech. Miraterra will use the seed funding to launch its first soil monitoring product with soil testing laboratories, rather than farmers, to build the credibility of its solution. “Our market research showed us that gaining the trust of agronomists and farmers’ partners was crucial,” said Miraterra’s Nate Kelly. Separately, UK-based CroBio clinched €1.5 million ($1.6 million) in a seed round led by the Grantham Foundation to store more water and carbon in soils using enhanced microbes.
  • Spin out. S2G Ventures has launched as a standalone business and registered investment adviser, after 10 years as the venture capital arm of Builders Vision, Walmart heir Lukas Walton’s impact investing entity. Listen to S2G’s Aaron Rudberg on February’s Agents of Impact Call, “Impact value-creation isn’t just for impact investors.”
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Dealflow overflow. Investment news crossing our desks:

  • Bluefront Equity’s second sustainable seafood fund secured $50 million from returning investors, including Cambridge Associates, Norwegian family office Havfonn and impact fund of funds manager Cubera. (Bluefront)
  • Atlanta-based EnviroSpark raised $50 million to expand its EV charging network in the US. (EnviroSpark)
  • Carbonfact, a Paris-based carbon management software developer, snagged $15 million in Series A financing to help fashion brands track and lower their carbon footprints. (Carbonfact)

Impact Voices: Gender Smart

Pension funds help catalyze gender-lens investments in Asia. Women-owned businesses face a global financing gap of $1.7 trillion. Pension funds manage assets worth more than 20 times that. “Such institutional investors could ultimately determine the destination of innovative and impactful gender-lens financing,” writes Lisa Maria Braun, a consultant for the UN’s Economic and Social Commission for Asia and the Pacific, or ESCAP. Bangkok-based ESCAP offers grants, technical assistance and market-building convenings through its Catalyzing Women’s Entrepreneurship program for Southeast Asia. In a guest post on ImpactAlpha, Braun shares how pension funds can be catalytic – rather than catalyzed – investors in local gender-lens fund managers by providing anchor investments and/or helping crowd in other institutional investors. Local fund managers are critical for the financing of women-led businesses. “The role of pension funds as catalytic partners of gender-lens investing cannot be overstated,” Braun writes. “When catalytic capital is invested in gender-lens investment funds and effectively reaches women-led enterprises, it showcases businesses’ viability and sends an encouraging message to cautious institutional investors.”

  • Catalytic anchor. Danish pension scheme Paedagogernes Pension, or PBU, leapt into gender-lens investing with a $15 million anchor investment in Singapore-based Sweef Capital, a first-time woman-led fund in ESCAP’s portfolio. The investment “is probably the most targeted investment that we have towards gender,” says PBU’s Rasmus Juhl. PBU’s relatively small commitment from its multi-billion-dollar portfolio enabled Sweef to start writing checks to women-led businesses like Teky Academy, a Vietnamese edtech venture providing multidisciplinary education for children, and USM Healthcare, a local manufacturer of cardiovascular products in Vietnam. “The example serves as a beacon for other pension funds to follow suit,” Braun says. “Now is the time for institutional investors to leverage their immense assets to foster a more equitable and sustainable economic landscape.”
  • Keep reading, “Pension funds help catalyze gender-lens investors in Asia,” by ESCAP’s Lisa Maria Braun on ImpactAlpha. PBU’s Juhl and Sweef’s Jennifer Buckley will discuss their partnership at ESCAP’s Feminist Finance Forum, taking place in Bangkok, May 7-8. ImpactAlpha is a media partner. 

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

David Talbot, previously with the Milken Institute, joins the Indo-Pacific Partnership for Prosperity as executive director… ImpactPHL is recruiting a CEO in Philadelphia… The W.K. Kellogg Foundation seeks a vice president of impact… Elea is hiring a senior investment associate in Mexico City… Zevero seeks a marketing manager in London. 

Nathan Cummings Foundation is looking for associates of economic and racial justice… Duke University is hiring a research associate covering the benefits of natural and working lands…. ALIVE Ventures’ Santiago Alvarez will host an impact investing panel at Colombia VC Week with 60 Decibels’ Sasha Dichter, and Daniela Konietzko of Fundación WWB Colombia, Wednesday, May 15. 

The USAID-led Climate Gender Equity Fund is accepting grant proposals until Friday, May 17 from fund managers, network organizations and intermediaries that are addressing the climate + gender + health nexus in emerging markets… The Bertha Center at the University of Cape Town and Tshiamo Impact Partners are hosting “Impact Investing in Africa,” a course for wealth managers, fund managers, consultants and financial intermediaries, July 8-12 in Nairobi.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– May 6, 2024