The Brief | November 13, 2018

Applying a gender lens to gender-lens funds, securitizing social bonds, managing opportunity zone risks, better-world MBA rankings

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Some high-profile gender equality funds get low scores…for gender equality. Fearless Girl has some explaining to do. State Street Global Advisors installed the statue of a defiant girl standing her ground in front of Wall Street’s Charging Bull last year in part to market its SHE exchange-traded fund. Now, an online tool that helps investors assess the portfolios of exchange-traded and mutual fund rates State Street’s SHE ETF as mediocre at best across a dozen indicators of gender diversity and gender balance. Another high-profile gender-lens mutual fund, Glenmede’s Women in Leadership U.S. Equity Portfolio, also got low marks for gender balance and overall.

The shareholder advocacy group As You Sow released the free tool, Gender Equality Funds, to help individual and institutional investors apply a gender lens to the often-opaque funds that are the mainstays of most retirement and other accounts. The tool uses ratings on 4,000 companies compiled by Equileap, based on a dozen indicators that measure commitment to gender diversity and gender balance in companies’ leadership, management, and workforce. As You Sow applies the company ratings to the 5,000 or so funds tracked by Morningstar to generate a gender equality portfolio score for each fund. “We’re going to have conversations with them,” As You Sow’s Andrew Behar said of the low-scoring funds. “We want to understand how they’re picking their funds and what the methodology is. I want to talk to the fund managers.”

Keep reading, “Some high-profile gender equality funds get low scores…for gender equality,” by David Bank on ImpactAlpha.

  • Get smart about new funds, investment products and initiatives driving impact alpha with a gender lens. Join ImpactAlpha’s David Bank and Catalyst at Large Suzanne Biegel on ImpactAlpha’s Agents of Impact Call No. 5, Tuesday, Nov. 20th at 9:00 am PT / 12:00 pm ET / 5:00 pm GMT. RSVP for The Call.

Dealflow: Follow the Money

Bridges Israel backs precision irrigation company NDrip. Israel-based NDrip makes drip-irrigation technology applicable to large-scale agriculture. The systems save water and boosts yields, and cost less than traditional flood irrigation systems. The $50 million Bridges Israel fund (a sister to Bridges Fund Management) backed the firm to tackle “two major global challenges: the growing water shortage and the increase in food insecurity.” The undisclosed investment is Bridges Israel’s second investment. Learn more.

Amalgamated Bank joins $26 million closing of Insikt social bond securitization. Insikt – pronounced ‘in-seekt’ – makes small loans to unbanked and underbanked Americans through its lending platform Lendify. The tech-savvy community development finance institution packages the loans into securities and issues bonds to financial institutions, foundations and private investors. Its latest, $26 million securitization attracted Amalgamated Bank, a B-corp-certified commercial bank that went public on the NASDAQ stock exchange in June. The details.

Impact Voices: Pass the Mic

Reducing risks by managing for impact in Opportunity Zone investments. Not knowing the impact of Opportunity Zone investments puts communities, as well as investors seeking tax-advantaged returns, at risk. “The good news: impact investors have spent a decade building the tools to measure and management impact,” even without a federal mandate, writes Tideline’s John Griffith in a guest post on ImpactAlpha. More from Griffith:

  • No mandate. The Treasury Department estimates that the capital-gains tax break will direct as much as $100 billion in private capital into economically distressed communities over the next decade. Will the influx of private investment yield tangible benefits to the people who live in those communities? We may never know. Treasury has yet to require Opportunity Zone investors to report the number of jobs they create or any other impact metrics.
  • Real risks. Lack of impact accountability is a missed opportunity for policymakers. It also poses risks to OZ investors and fund managers: If projects do not address clear community needs or deliver tangible benefits, objections from locals could lead to long delays and additional costs.
  • Best practice. “Fund managers are much more likely to adopt impact management strategies if investors start demanding it,” said Lisa Hall of the Beeck Center at Georgetown University. “Impact management” is the practice of integrating impact considerations at each stage of the investment process.

Read, “Risk mitigation should drive impact reporting on Opportunity Zone investments,” by Tideline’s John Griffith on ImpactAlpha.

Agents of Impact: Follow the Talent

Former AFL-CIO attorney Corey Klemmer is the new managing director of corporate engagement at Domini Impact Investments… Spring Point Partners is hiring a chief investment officer of impact Investing in Philadelphia (see, “Philadelphia leaders commit $15 million to one-stop investor for social startups)… Corporate Knights’ 2018 “Better World” ranking of MBA programs is out. Top spots went to Warwick and the University of Exeter in the U.K. and York University in Canada… Urban Innovation Fund opened an office in Minneapolis.

November 13, 2018.