Activest’s FIRE strategy seeks to bend the arc of municipal finance toward ‘fiscal justice.’ It’s distressingly easy to find places where city finances are distorted by systemic racism or outright bigotry. It’s harder to spot projects that are using financial tools to redress social harms and advance racial equity. Activest, the investment research and analytics firm, made its reputation by calling out credit risks in cities that, for example, are reliant on excessive fees and fines on their residents of color. To finance solutions, Activest is preparing to become an investment advisor itself. With Florida-based Community Capital Management, Activest later this year plans to launch the FIRE Fund, for "fixed-income racial equity," to help investors back municipal bonds and other fixed-income products that move capital to what it calls “fiscal justice.” “FIRE addresses the way that debt in the form of fixed-income products has been inaccessible, extractive and harmful for Black residents,” Activest’s Ryan Bowers tells ImpactAlpha. “FIRE provides a different model of investing that centers the voice and perspective of Black people and communities and takes a regenerative approach to community wealth-building.”
Dealflow: Regeneration Finance
Obvious Ventures backs Senken to finance reforestation through ‘carbon forwards’. Berlin and Cape Town-based Senken is a blockchain-based carbon credit trading platform. Its next offering is a form of advance-purchase carbon credits to support reforestation and ecosystem restoration projects in development. The carbon credit “forwards” provide investors with discounted carbon credits in return for financing environmental projects upfront. Senken plans to test the concept with a verified mangrove restoration project in Kenya. Obvious Ventures led the $7.5 million financing round. Offline Ventures, Inflection, Kraken Ventures and Climate Capital participated.
Impact Voices: Community Capital
How Fair Food Network is reshaping investment norms to fight wealth inequity. New place-based funds that take a community-first approach are helping shift power dynamics and investing norms that have led to wealth inequity. “Capital is an expression of relational, structural and personal power,” write Anjali Deshmukh of Make Justice Normal and Fair Food Network’s Noah Fulmer and Kate Krauss. “Though often made invisible, these power dynamics are root causes of wealth gaps.” The Fair Food Network, an Ann Arbor, Mich-based nonprofit, is helping stand up the Michigan Good Food Fund, which is raising grant and catalytic capital to unlock $40 million for mission-driven and diverse-led food enterprises. A community board made up of local food entrepreneurs, nonprofits, government, and financial and technical assistance providers sets direction and performance targets for the collaborative.
Agents of Impact: Follow the Talent
ImpactAlpha partner event: New Ventures is hosting the Latin America Impact Investing Forum, or FLII, Feb. 28-March 2 in Mérida, Mexico. ImpactAlpha subscribers get 35% off with the code IMPACTALPHA35.
Editor’s note: This article is sponsored by Johnson & Johnson Impact Ventures, which supports ImpactAlpha’s Investing in Health coverage. In partnership with J&J Impact Ventures, ImpactAlpha is exploring the …