The first wave of impact investors in Latin America built a big tent for individuals and institutions to mobilize capital for solutions to pressing social and climate challenges. Asset managers built funds. Allocators committed capital. And entrepreneurs raised financing for promising social and climate startups.
The task for the next wave of investors: Expand the tent.
“Change is not led by one person, but by a collective of organizations,” says Carolina Suarez, who is helping build the field as head of Latimpacto, the Latin America arm of the global venture philanthropy network.
At “Impact Minds,” Latimpacto’s annual conference in Oaxaca, Mexico this week, long-time impact practitioners shared hard-earned lessons and mobilized capital for new strategies. New entrants met seasoned players. Wealthy families, foundations and corporations found entry points.
“We’re here to bet on impact for Latin America,” said Lorena Guille of Monterrey-based Fundación FEMSA. Outmoded business and investment models let inequality and violence take root in the region, says Guille. “It’s possible to build a different legacy. Today we’re writing a new chapter.”
The conference was full of evidence for that new chapter. ImpactAlpha dug up details of deals, fundraises, mergers and milestones.
Catalytic capital and blended finance
- Impact bonds. IDB Invest, the private sector arm of the Inter-American Development Bank, has structured, invested in, and mobilized private capital for three first-of-a-kind impact-themed bonds in Central America over the last 12 months, including a $50 million sustainability bond in Guatemala, a $50 million blue bond in Costa Rica, and an $80 million social/gender bond in El Salvador. The development financier has now supported 43 thematic bonds that have raised more than $3.7 billion in Latin America. The bank is helping originate, guarantee and raise such capital as part of a strategy shift to take on more risk and make Latin American impact investments more attractive to global investors. The bank aims to be “a conduit between opportunities that generate scalable impact within our region and international and global investors,” IDB Invest’s Jan Petter Eskildsen told ImpactAlpha.
- Climate fellows. Rockefeller Foundation’s Natalye Paquin touted investments in Mombak, an Amazon reforestation fund, and CHAI, which uses predictive modeling to stem malaria in Honduras and other Latin American countries. She introduced the foundation’s “15 big bets” climate fellows, including Erika Berenger in Brazil (avoiding forest fires), Marcela Angel in Colombia (early warning for landslides) and Elena Martínez in the Dominican Republic (seaweed harvesting). “Investing in multipliers like these fellows is the best way to slow and reverse the climate crisis,” said Paquin.
- Adaptation. Madrid-based Gawa Capital has secured more than €150 million ($166 million) for its €300 million Kuali Fund, a climate adaptation fund focused on solutions for communities of farmers and small businesses in Latin America and the Caribbean. The manager expects a first close by year’s end. The fund leverages a €37 million first loss tranche, €50 million in subsidized debt, and €12 million in technical assistance to mitigate risk for private investors, which have so far committed more than €70 million to the strategy.
- Open call. Coca-Cola and Bayer Foundation, along with IDB Lab and Inter-American Development Bank’s Amazon Unit have all backed IDB Lab’s Green Catalytic Fund, a fund collaboration with Latimpacto. Separately, Bogotá-based Fundación Arturo Sesana, in partnership with IDB Lab and other partners, launched Region Plateada, or Silver Region, a multilateral fund to support elderly care services and workers in Latin America. Both funds (Green and Silver) issued calls for proposals for funding.
- Commercial banking. Smartfish, a Mexico City-based fish supply chain traceability, leveraged a loan from the Walton Family Foundation to grow its operations and sales, allowing it to access a larger, commercial loan to expand nationally.
Actively raising impact funds
- Latin alpha. Fundraising is ahead of schedule for AlphaMundi’s ALA 30, for “Alpha Latin America 2030,” the Geneva-based fund manager’s first equity fund in Latin America (since 2014, the manager has invested $125 million in Africa and Latin America). AlphaMundi initially aimed to raise $20 million of the $50 million fund by March 2025; investor expressions of interest already amount to $25 million.
- Gender smart. Deetken Impact is raising a fresh $40 million for its Ilu Women’s Empowerment Fund, an evergreen gender-lens debt fund focused on Latin America and the Caribbean. The Canadian impact asset manager tells ImpactAlpha that the fund has delivered consistent risk-adjusted returns over the last seven years at the intersection of gender equality and climate resilience.
- Colombian market. Bogotá-based Corporación Inversor is actively raising its second fund. Fund one backed five companies, including Colombian sustainable mobility company Mejor en Bici. Separately, Impacta Fondo, an impact fund hosted at Bogotá-based Universidad EAN, has raised $1 million of its $10 million target. The fund has made six investments, including in Refurbi, which refurbishes and sells smartphones, making them more widely accessible.
- Revenue-based. Quito-based IMPAQTO Capital aims to make the final close of its first, $2 million, revenue-based finance fund in the next few months. The fund manager has already made four investments from the fund, including in Lima-based ELSA, which helps companies use tech solutions to prevent sexual harassment in the workplace.
- Young entrepreneurs. Haiti Startup Talent has seeded over 100 of Haiti’s young entrepreneurs with capital and know-how to boost their impact and alignment with the Sustainable Development Goals. The Port-au-Prince-based nonprofit, backed by the Inter-American Development Bank through the Haitian government, is actively raising to provide follow-on capital to successful startups.
Impact mergers
- Teaming up. Mexico-city based Kaya Impacto, a financial advisor to impact funds and enterprises, has merged with Amplo, a Bogotá-based impact investment management company. The combined entity, AmploKaya, will provide advisory as well as asset management services for impact investors in the region.
