⏱️ Happening today: “Unlocking impact – and climate – alpha in Brazil.” Join The Call to explore the growing impact investing ecosystem in Latin America’s largest market, today at 1pm ET. Still time to RSVP.
Latin America’s largest country is in the climate hot seat this year.
The Amazon city of Belém will host the COP30 climate summit in November just as the US is set to exit from the Paris climate accord. Brazil is seizing leadership not only on climate, but in impact investing more broadly, with a new National Impact Economy Strategy, or Enimpacto.
“We’re in a very exciting moment,” says Giselle Vianna, who coordinates the strategy at the Ministry of Development, Industry and Foreign Commerce. The policy, launched in 2017, aims to boost impact investing in the country from $11 billion to $120 billion over 10 years with blended finance, investment incentives and more inclusive procurement. “It has crossed many different governments from different ideologies, so it’s resilient.”
A sign of the opportunity: The small, underdeveloped state of Rio Grande do Norte in northeast Brazil has emerged as the early leader in implementing local impact economy laws. Nine other states, including Ceará, Espírito Santo and Rio de Janeiro have begun to introduce laws.
Later this year, Enimpacto will launch a national database of impact companies that drives public policies and helps attract private investment. Says Vianna, “This is the moment that we want to consolidate this expansion.”
From ESG to impact
“We have to be very creative about where we look for solutions,” adds Fabio Alperowitch of Fama Re.Capital, a São Paulo-based impact asset manager that has managed an ESG Equities Fund for 30 years.
In 2023, Fama launched the LatAm Climate Turnaround Fund to push high-emitting companies to decarbonize. The separate Fama Gaia Socio-Bioeconomy Fund makes affordable loans to small regenerative agriculture businesses and cooperatives. Fama is set to launch a gender equality fund to lend to women entrepreneurs.
To mainstream impact “we need to offer funds with market-rate returns,” says Alperowitch. “My intention is to change the whole system, so we can compete against traditional products by offering comparable returns.” Of note: The climate turnaround fund is finding more traction with limited partners in the Middle East and Asia than in the US and Europe.
Family affair
Brazilian families are “motivated by the impact,” says Wright Capital’s Fernanda Camargo, who manages the wealth of over 40 Brazilian families. She has created three in-house funds-of-funds, each roughly $30 to $40 million, to cut the transaction costs of investing in smaller funds. Wright is standing up another fund to focus on nature-based solutions, regenerative agriculture and climate tech.
“We have an infinite amount of opportunities in the bioeconomy,” Camargo told ImpactAlpha. Camargo’s clients have invested with Brazilian impact fund managers, including Vox Capital, MOV Investimentos, Positive Ventures, Rise Ventures, GEF Climate Solutions, Yunus Negocios Sociais and Estímulo.
Inclusive economy
Building a more inclusive market is a cross-cutting component of Enimpacto, and key to growing Brazil’s economy.
Once again this May, thousands of visitors will descend on Parque Ibirapuera in São Paulo for the Feira Preta festival, the largest Black cultural and entrepreneurship event in Latin America. Founder Adriana Barbosa will lay out the case for investments in Brazil’s African descendents.
Over two decades, she has grown Feira Preta into a platform that has helped plug more than 10,000 Black and Indigenous creative entrepreneurs into the Brazilian economy. It’s “an economically active population,” says Barbosa.
