The Brief | June 25, 2019

Art investments in southern hometowns, financial health of the underserved, TPG backs Harlem Capital, Generation’s trendspotting

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Greetings, Agents of Impact! 

Featured: ImpactAlpha Original

Foundation to invest $1 million in artists’ hometowns in the U.S. south. Atlanta-based Souls Grown Deep is grappling with one of the realities of the art world: artists often reap little of the value of their work. Starting in the 1980s, art historian William Arnett began collecting works of largely unknown African American artists in the south, such as Thornton Dial and the quiltmakers of Gee’s Bend in Wilcox County, Alabama, whose work inspired Amy Sherald’s portrait of Michelle Obama. The foundation, which now holds one of the largest collections of art by African American artists in the U.S. south is committing $1 million over three years – the bulk of its endowment – to support racial and social justice as well as jobs and community development in the communities where those artists lived and worked.

The impact investing strategy was developed in partnership with Upstart Co-Lab, a network of investors in “the creative economy,” as a way to share some of the growing value of Souls Grown Deep’s collection with the families and communities of the 160 artists who created the more than 1,000 works. The approach could prove attractive to other arts-based institutions as well. At least $58 billion sits in the endowments of museums, performing arts organizations, art schools and artists’ foundations. So far, few have directed those assets toward mission-related investments. “Boards are now facing protests, petitions and public outcry about individual trustees and the sources of their wealth creation. This approach is a way to redirect the conversation,” Souls Grown Deep’s Maxwell Anderson told ImpactAlpha. “We feel like we’ve entered into a new framework for the arts.”

Keep reading, “Souls Grown Deep Foundation to invest $1 million in artists’ hometown in the U.S. south,” by David Bank on ImpactAlpha.

Dealflow: Follow the Money

Prudential backs Aura to help underbanked customers build their financial futures. Aura is a community development financial institution that offers starter lines of credit to some of the 66 million un- and under-banked adults in the U.S. The company partners with retail outlets, like grocery stores, to offer small lines of credit at affordable rates at the point of sale. It has loaned more than $400 million through 1,200 retail partner locations in California, Texas, Illinois and Arizona since 2014. Prudential Financial backed the company with a $10 million convertible note as part of its $1 billion impact portfolio. Prudential’s Gerald Pambo-Awich told ImpactAlpha the investor was attracted to Aura’s face-to-face lending approach and interest rates that are capped at 36%. Aura aligns with Prudential’s strategy to help people build financial health and prepare them for services like retirement savings and life insurance. “It’s about how do we help people make the journey to achieve financial wellness and security.” Get the full story.

TPG invests in Harlem Capital and its fund for minority entrepreneurs. Investors are moving to seize “inclusion alpha.” TPG made an undisclosed equity investment in New York-based Harlem Capital, which invests in minority- and women-run startups, and joined Harlem’s first fund as a limited partner. Women founders and founders of color attract 3% or less of all venture funding. Harlem was started by Harvard Business School students Henri Pierre-Jacques and Jarrid Tingle, who launched Harlem’s first fund in December. Harlem is targeting a $25 million raise and has backed 10 companies. Read on.

Dealflow overflow.

  • London-based retail impact investing company Tickr closed £1 million ($1.3 million) in equity funding by turning to the type of investors it aims to serve, crowdfunding the capital through the Seedrs platform.
  • Breakthrough Energy Ventures follows its investment in Nigerian ride-hailing service with support for Nigerian distributed utility company, Arnergy. The Norwegian Investment Fund for Developing Countries, EDFI ElectriFI and All On also backed Arnergy’s $9 million round.
  • U.K.-based peer-to-peer lender Funding Circle clinched £30 million ($38.2 million) for a private debt fund for small and mid-sized companies. The fund, called U.K. Economic Impact Fund, is backed by local government pension scheme Merseyside Pension Fund. 

Signals: Ahead of the Curve

Food, electric mobility and healthcare next up in ‘sustainability revolution.’ Clean energy was first to tip. Next up in the sustainability disruption: food, healthcare and mobility systems. “We’re clearly in the era of sustainability disruption,” Lila Preston of Generation Investment Management told ImpactAlpha. With more than 250 sources and 141 slides, the $22 billion sustainable investment manager charts the transition to a cleaner, more circular and more inclusive economy in its third Sustainability Trends Report. “It’s not a fringe activity anymore. It’s transforming industries across the board.” Note: ImpactAlpha’s post and Generation’s report will go live at 9 am ET. 

Agents of Impact: Follow the Talent

Peter Lupoff is named chief executive officer of Net Impact… Glenmede, the $40 billion wealth manager, becomes a signatory to the UN Principles of Responsible Investing… Village Capital is recruiting agriculture entrepreneurs for its ‘Africa agriculture’ accelerator with Ceniarth and Small Foundation… Mercy Corps is hiring a senior managing director of digital financial services and innovation in Washington DC… Also in DC, Evergreen fintech fund Flourish Ventures seeks an associate.

June 25, 2019.