From Atlanta to St. Paul, bond issuers are steering muni markets toward racial equity. When the city of St. Paul, Minn. needed to remove and replace trees devastated by an invasive insect, the city floated a municipal bond and prioritized neighborhoods with the lowest tree canopy, largely in low-income parts of the city. In Atlanta, proceeds from a “social bond” last year were earmarked for affordable basic infrastructure, access to essential services, and socio-economic advancement. Issuers across the country are increasingly tapping the $4 trillion municipal bond markets for capital to redress long-standing inequities. Boston-based Public Finance Initiative is convening issuers from St. Paul and Atlanta, as well as Chicago, Dallas and other places, to better understand the racial equity and social impacts of bond issuances. “There’s no common system for measuring impact,” Atlanta Treasurer Courtney Knight tells ImpactAlpha. “We wanted to take a leadership role in the bond market and be very scientific about developing a specific set of measurements around the impact of our investment.”
Dealflow: Funds of Funds
Emerging fund managers score nearly $30 million for Africa’s small businesses. Mastercard Foundation’s Africa Growth Fund has allocated $200 million for investment managers supporting economic opportunities for women and youth (see, “Funds of funds provide more than capital for local investors in small and growing businesses”). Mastercard’s latest deals, totalling $27 million, include $8 million for Tanzania-based SME Impact Fund, which invests in agrifood businesses that work with smallholder farmers. VestedWorld scored $10 million for its second fund, a $50 million vehicle called Rising Star Fund that makes early-stage investments in Ghana, Nigeria and Kenya and intends to expand to other African countries (see, “The Liist”). Nairobi-based Chui Ventures, a women-led fund, notched $9 million for its planned $20 million fund for seed-stage tech investments in Kenya and Nigeria. The investment is a “game-changer for exceptional African startups,” said Chui’s Joyce Ann Wainaina.
Driving foundation endowments toward social justice. Friends of ImpactAlpha Eric Horvath and Lucas Turner-Owens are out with the second episode of Impact(ed), featuring interviews with BIPOC practitioners working to unlock the power of investing for good. Private foundations, with more than a trillion dollars in investable capital. In the episode, Horvath and Turner-Owens speak with Essma Bengabsia of the Annie E. Casey Foundation to explore the untapped potential of foundation investing.
Impact Voices: Due Diligence
How institutional investors can up their sustainability game in private markets. Institutional investors have pushed private equity funds to adopt environmental, social and governance, or ESG, considerations. But they struggle to assess the depth of funds’ approaches and fall short on ESG in their due diligence, according to the Center for Sustainable Business at New York University’s Stern School of Business. “There is clearly an opportunity for improvement,” write NYU’s Tensie Whelan and Julien Marchese, and Arthur D. Little’s Jessica Weiss. In their latest guest post, they introduce a tool to help investors assess fund managers and “measure the actual impact and financial benefits of specific sustainability strategies, rather than the typical yes/no compliance exercise.”
Agents of Impact: Follow the Talent
Macro, the film and production company, names Reena Singh, ex- of The Walt Disney Company, as executive vice president… John Guzek, ex- of SES ESOP Strategies, joins Ownership Works as business engagement manager… Antonia Chorschew, ex- of Ufenau Capital Partners, joins Blue Earth Capital as a fundraising and investor relations associate… The IFRS Foundation elected Emmanuel Faber to a second three-year term as chair of the International Sustainability Standards Board.