Billion-dollar (private-equity) babies, The Call No. 2 today, vertical airplane food, secrets of impact investing professors



Welcome to Thursday, ImpactAlpha readers!

It’s today! Please join our Agents of Impact Call No. 2 at 1 pm ET / 10 am PT / 5 pm GMT. If you have already RSVP’ed, you’ll receive the call-in details by email shortly. For last-minuters, we’ll post the call-in details on ImpactAlpha’s Slack channel 30 minutes before the call. Bring your questions (and answers)!

Featured: ImpactAlpha Original

Billion-Dollar Babies: Can big private-equity funds point the way to impact-driven growth? One of the striking developments in impact investing in recent years is the growth of fund managers that have crossed the billion-dollar mark in assets under management. Some, such as Leapfrog Investments have grown up as impact funds. Others, such as TPG Growth’s Rise Fund (with $2 billion) were hatched inside “conventional” private-equity firms. KKR is out raising for a $1 billion Global Impact Fund. It’s not easy to put a billion dollars to work for impact. So ImpactAlpha is taking a look at where big private equity firms are placing their bets, starting with our own dealflow and other coverage.

Climate change, resource constraints and shifting consumer demand for healthy and sustainable food options is transforming the $7.8 trillion food and agriculture industry, which employs 40% of the world’s population. Some two billion people in low- and middle-income countries have mobile phones but limited access to financial services. India’s aggressive shift to solar energy is attracting lots of dealmakers. “The con­ver­gence of impact and pri­vate invest­ments isn’t just a pre­dic­tion or a ‘weak sig­nal’ we’re sens­ing,” Cambridge Associates wrote in a post last month. “It’s pal­pa­ble – here and now.” One key to keeping the trends on track: impact management. Measuring both positive and negative impact is essential if firm’s want to capture that impact alpha.

Go deeper on private equity impact investing with “Billion-Dollar Babies: Can big private-equity funds point the way to impact-driven growth?” by David Bank and Dennis Price.

Then join the private-equity discussion on “The Call” TODAY. Look for call-in info in your inbox or on ImpactAlpha’s Slack channel.

Dealflow: Follow the Money

Crop One and Emirates partner to bring vertical farming to airlines. California indoor farming venture Crop One and Emirates Airlines will build one of the largest indoor farms ever. The $40 million, 130,000-square-foot facility will supply Emirates Airlines and more than 100 other airlines operating out of Dubai airport. The project is the latest in a string of indoor farming developments for Dubai, which imports most of its food. The farm is designed to produce three tons of greens at a time, using 99% less water than traditional agriculture. More.

Korean bank Woori buys VisionFund Cambodia. Woori Bank, a large Korean commercial bank, has acquired World Vision International’s largest microfinance operation. Microfinance is a crucial service for Cambodia’s mostly rural population. VisionFund Cambodia has built a $175 million loan portfolio over more than 20 years; 90% of its more than 200,000 clients are women. The details.

Florida Community Loan Fund finances Boys & Girls Club. The community development financial institution is committing $10.5 million in New Markets Tax Credits to build a new club for the Boys & Girls Club in Manatee County, Florida. The club provides academic support, mentorship, and healthy activities for 2,400 youth members, three-quarters of whom are low-income. One study found that every $1 invested in the organization yields $9.60 in community earnings and cost savings. Dig in.

Signals: Ahead of the Curve

Impact investing business profs to share their syllabi and other secrets. The price of admission to this week’s gathering at the Kellogg School of Management is an actual course syllabus for teaching impact investing. The nearly 100 members of the Impact and Sustainable Finance Faculty Consortium have agreed to share not only syllabi, but research, cases and experiential exercises they use in their classes. “No one has blinked” at such collaboration, Kellogg’s Megan Kashner told ImpactAlpha. “People are so eager to share and have access to one another’s content, to move the field toward mainstream adoption and canonization.” More than 50 profs are expected at the second annual meeting. Organizers come from HBS (Harvard), Haas (Cal), Cornell and Maastricht, as well as Kellogg (Northwestern); participants are arriving from Kenya, South Africa, Brazil, Korea and elsewhere as well as from dozens of U.S. schools. (Disclosure: ImpactAlpha’s partnership with the consortium makes The Brief and ImpactAlpha.com available as teaching resources for impact faculty and students.)

  • Tenure track. Consortium members teaching impact investing are increasingly full-time and tenure-track. A growing number are coming from schools other than business, including public policy and undergraduate programs.
  • Beyond VC. Student interest is growing beyond angel and venture-style impact finance to include institutional investing, public-private partnerships and market-rate private-equity fund management. “Students today are super smart about what makes a difference,” Kashner said. “They can understand the differences in scale and risk profiles” between impact startups and proven interventions with broader or less risky impact.
  • Hybrid talent. Students in impact investing courses are charting broad career paths in business and finance, not just in impact investing. Kashner says she tells students, “For anybody in the field of finance, here’s what you’re going to need to do your job and bring your values with you.”

Firms are increasingly touting their impact bona fides as a way to attract MBA talent. Kashner said one top executive recently told students, “You are the talent we are all seeking and fighting over. If your employer is not giving you the opportunity to lead on sustainability and fulfill your passion for impact, leave and work for someone who does.”

Agents of Impact: Follow the Talent

The Case Foundation’s Jade Floyd has rounded up 35 impact investing conferences to watch. Next up: the Vatican Impact Investing ConferenceJuly 8-11 in Rome… Sphaera’s post on ImpactAlpha has spurred a broader inquiry into collaboration among impact investing networks and platforms. Astrid Scholz is collecting ideas in a 15-minute survey… Enterprise’s Tiffany Manuel told the Housing Credit Connect gathering in Chicago: “Our goal is to ensure that every Opportunity Zone investor is a social impact investor.”

— June 28, 2018.

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