The Brief | August 20, 2018

Ceniarth’s $200 million shift, Branson’s climate-smart accelerator, Warren’s mandate for stakeholder capitalism

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Featured: Impact Voices

Fighting poverty and remaining rich. Diane Isenberg, founder of the $325-million family office Ceniarth, sets out a common-sense approach for the growing number of high- and ultra-high net worth individuals who have set their sights on impact. “If you are rich today and invest in a manner that generates deep impact, and returns your capital with a yield in line with inflation and reasonable expenses, you will still be rich tomorrow,” Isenberg writes in a guest post on ImpactAlpha.

Operationalizing that insight, Ceniarth will shift more than $200 million over the next decade into a strategy Isenberg calls “Impact-First Capital Preservation.” The strategy identifies managers and direct investments that support enterprises directly serving poor and underserved communities such as Global Partnerships, GroFin, Water Equity, and Root Capital. It also includes loans to U.S. community development financial institutions in regions of persistent poverty and fund managers that deliver attractive returns and real impact, such as Advance Global Capital, Microvest, Lendable, Community Investment Management, and others, Isenberg writes. Returns may be modest, but Ceniarth has found that risks are often overstated or misunderstood. To execute the shift, Ceniarth will divest from “responsible investments” that target market-rate returns.

For Isenberg, whose father Gene was CEO of Nabors Industries, one of the world’s largest land and offshore platform oil drillers, “The most responsible choice I can make is to abandon the need to make more money, while trying to preserve and recycle it to do future good.”

Read more about Ceniarth’s strategy and portfolio in “Fighting poverty and remaining rich: Ceniarth shifts portfolio to impact-first capital preservation,” by Diane Isenberg on ImpactAlpha.

Dealflow: Follow the Money

Richard Branson launches accelerator to bolster climate resilience in the Caribbean. The billionaire has been at the forefront of international efforts to strengthen the region’s climate resilience, infrastructure and energy independence. Branson’s Caribbean Climate-Smart Accelerator, conceived at last year’s One Planet Summit in Paris, will help finance and scale startups in 26 Caribbean countries and territories and channel billions of dollars in international pledges to the region’s climate-change mitigation needs. Read on.

Wonderschool raises $20 million to launch preschools and childcare centers. Andreessen Horowitz led the financing for the in-home preschool startup, which helps educators and caretakers launch their own preschools and daycares. Since launching two years ago, Wonderschool has helped start 140 preschools and childcare centers in San Francisco, New York and L.A. Other investors include Omidyar Network, Gary Community Investments and First Round Capital. Learn more.

Full Harvest secures $8.5 million to help farmers sell “ugly” produce. The San Francisco-based startup is tackling food waste by facilitating sales of less-than-perfect produce. It has helped farmers sell about seven million pounds of “ugly” produce to food processors, packaged goods businesses and other food and beverage companies. Full Harvest’s Series A round, led by Spark Capital, follows a $2 million raise in April. Dig in.

Signals: Ahead of the Curve

Elizabeth Warren stirs the pot with a proposal to take ‘benefit corporations’ national. The Massachusetts senator and possible presidential candidate is seeking to replace “shareholder capitalism” with “stakeholder capitalism.” Her ‘Accountable Capitalism Act’ would require corporations with more than $1 billion in annual revenue to get a federal corporate charter. “Benefit corporation” legislation in 34 already allow, but don’t require, businesses to consider workers, customers and communities in business decisions. Not surprisingly, Warren’s proposal generated strong reactions:

  • Vox’s Matthew Yglesias writes, “Warren’s plan starts from the premise that corporations that claim the legal rights of personhood should be legally required to accept the moral obligations of personhood.”
  • Harvard professor Jeffrey Miron told CNBC, “The right way to help people who are very poor is through a social safety net of the kind that we already have … not to interfere with capitalism, which is going to make a lot more people have low income and be poor, in particular by driving corporations out of this country.”
  • B Labs’ Jay Coen Gilbert, in Forbes, argued that corporations could get ahead of mandates by voluntarily adopting existing state-level benefit-corporation structures. Gilbert said major investors such as BlackRock could signal that benefit corporations are a “new model of corporate governance” of the sort BlackRock CEO Larry Fink called for in his annual letter earlier this year. (Listen to ImpactAlpha’s Returns on Investment podcast, “BlackRock to CEOs: Get a long-term purpose, stat!”)

Agents of Impact: Follow the Talent

Deepali Khanna was named managing director for Asia at the Rockefeller Foundation… Opportunity Finance Network is recruiting a chief lending and investment officer… Echoing Green is hiring a senior associate for its Black Male Achievement program.

— August 20, 2018.