Greetings, Agents of Impact!
Featured: Impact Voices
Bobby Turner: Successful Opportunity Zone investments will pull people up, not push them out. The former hedge fund partner turned impact investor is an outspoken contrarian on the Opportunity Zones legislation included in the 2017 U.S. tax bill. Itâs not that low-income, inner-city neighborhoods donât need the infusion of capital. âOf all the factors stifling Americaâs underserved communities, a dearth of economic investment is among the most pernicious,â Turner writes in a guest post on ImpactAlpha. Itâs that the legislation doesnât overcome the perceived risks that are the main reason institutional capital has stayed away from disadvantaged communities. Turner fears Opportunity Zones will leave many investors wondering, âWhat good is a capital gains tax break on an investment that is likely to lose money?â
Reducing those risks requires humility, empathy and other skills not always taught in business school, Turner writes. âA top-down, âwe know bestâ attitude in working with communities is the surest path to failure.â Workforce housing developments operated by Turner Impact Capital include after-school tutoring programs, neighborhood watches and health and wellness services on site, he says. Professionals who provide services to fellow residents get discounted rent. The results: âImproved quality of life, higher tenant satisfaction rates, and longer lease terms â a winning model for everyone,â according to Turner. Such outcomes are unlikely for Opportunity Zone investors that seek to change the character of a neighborhood by building luxury apartments or destination retail, he writes. âFulfilling the spirit of the Opportunity Zone ideal means pulling people up, not pushing people out.â
Read, âSuccessful Opportunity Zone investments will pull people up, not push them out,â by Bobby Turner on ImpactAlpha.
Dealflow: Follow the Money
Entrepreneurs of Color Fund expands to Washington, D.C. JPMorgan Chaseâs initiative has $6.7 million to invest in minority entrepreneurs in Washington, D.C. The bankâs foundation launched the program in Detroit in 2015 and has added funds in Chicago, San Francisco and New York. The D.C. fund, which includes Capital Impact Partners and D.C.-based Clark Foundation, is part of JPMorganâs Advancing Black Pathways program to improve access to education, build career opportunities and support wealth creation. Advisors to the program include former Secretaries of State Colin Powell and Condoleezza Rice, Essence Venturesâ Richelieu Dennis and comedian Kevin Hart. Read on.
Acumenâs Latin America fund backs Peruvian skills startup Crehana. Acumen Latam Capital Partners led the $4.5 million financing for Lima-based Crehana, a startup that offers low-cost online training in the creative, design and digital industries. Two-thirds of Latin Americaâs young people donât advance into higher education. Crehana is trying to combat high youth unemployment rates by making professional and technical skills affordable and accessible. Prices for its 500 online courses and certificates start at $14. Crehana is the second investment since Acumen launched the Latin America fund in 2016. It invested in Phoenix Foods, an agri-processing company also based in Peru, in January. Learn more.
Agora Partnerships graduates 30 Latam and Caribbean startups targeting the Global Goals. Agoraâs accelerator program has been working to build social entrepreneurship in Latin America and the Caribbean since 2011. Thirty startups working to advance the U.N. Sustainable Development Goals in 10 countries have completed the organizationâs latest program. They include ethical fashion company AHA Bolivia, Chilean water tech company Capta Hydro, and Colombian organic beverage company DâCADA. The 215 companies that have graduated from the program have a 94% survival rate and have collectively raised $86 million. More than half are women-run. Dig in.
Signals: Ahead of the Curve
Underwriting â and optimizing â for impact on Agents of Impact Call No. 7 (audio). Limited partners are demanding more rigorous impact underwriting by fund managers. Successful projects also require ongoing impact management. On ImpactAlphaâs Agents of Impact Call No. 7, Y Analyticsâ Maryanne Hancock said impact measurement tools developed by TPG Growthâs Rise Fund will help the firm drive impact throughout the life of the fundâs investments. The Rise Fundâs âimpact multiple of moneyâ methodology âallows you to see up front the pathways that you have to manage to ensure youâll have impact down the road,â Hancock told nearly 200 ImpactAlpha subscribers on the conference call last week.
- Signs of progress. Limited partners are demanding more rigorous management of impact from fund managers because âthey now have a better idea of what that means,â said Tidelineâs Ben Thornley.
- Ongoing process. âYou measure the positive and negative impacts that matter to people and the planet. You compare those impacts when possible and appropriate. You know whether whatâs happening is bad, good, or as good as it could be. And then you improve,â says Impact Management Projectâs Clara Barby.
- Evidence base. The GIINâs Kelly McCarthy said consistent data is important, but âto actually vet those metrics against something that holds water, requires some sort of evidence base that has been collated and curated and can help prove or disprove that strategies that the investment community are looking at.â
- Bonus: Participants in the call turned up some excellent resources for underwriting and optimizing impact. We rounded them up.
Read on â and listen in â to âUnderwriting â and optimizing â for impact on Agents of Impact Call No. 7,â by Dennis Price on ImpactAlpha.
Agents of Impact: Follow the Talent
Kelly Ward was named director of development and placemaking at Albuquerqueâs InnovateABQ⌠IGNIA is looking for a full-time associate in MĂŠxico City and Monterrey, Mexico⌠Kapor Capital is hiring a talent director based in Oakland, Calif.⌠Urban-X is seeking a senior marketing and communications manager… Krogerâs new Zero Hunger Zero Waste Innovation Fund is accepting applications until March 4.
— February 12, 2019.Â