The Brief | August 28, 2019

Demonstrating impact in Opportunity Zones, LGT acquires Aspada, Quadria’s Asia healthcare fund, net-zero real estate, informal merchants

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Investments in ‘people and places’ start to demonstrate impact in Opportunity Zones. Capital is finally flowing to projects in U.S. Opportunity Zones that promote inclusive development and community empowerment. In other words, impact is investable. Locally led development efforts, homegrown startup activity and affordable housing investments from Erie, Pennsylvania to South Los Angeles are demonstrating that capital-gains tax incentives available in Opportunity Zones can harness capital for high-impact investments in “people and places.”

To be sure, the nation’s 8,700 Opportunity Zones also have attracted development activities that generate little benefit for local residents. But impact-led collaborations are showing that deep engagement with communities can mitigate investment risk and accelerate project timelines. “Local leaders and anchor institutions are working together because they feel a sense of urgency in jumpstarting growth,” Rachel Reilly of Economic Innovation Group told ImpactAlpha. “They are using Opportunity Zones as a call-to-action, and their collaborative approach has allowed them to move farther, faster.”

  • Place-based collaboration. Erie, Pennsylvania’s largest employer, Erie Insurance, deployed $3 million from its $50 million Opportunity Fund in a downtown culinary arts district developed by Erie Downtown Development CorpCapZone Impact Investments partnered with the Erie Innovation District in a $10 million Opportunity Fund to invest in Erie-based startups.
  • Engaging communities. In L.A., SoLa Impact, a decade-old impact fund manager, has nearly hit its $100 million Opportunity Fund target. SoLa invested $28 million to acquire 17 properties for affordable and workforce housing in South Central, Compton and Watts. Community organizations will provide social services for tenants.
  • Preserving affordability. In Texas, Ross Baird’s Blueprint Local has made its first Opportunity Zone investment in a 279-apartment complex in East Austin. The developer promises to preserve 10% of units for low-income residents in a rapidly gentrifying part of the city.
  • Upward mobility. Derrick Morgan, a nine-year NFL veteran, stepped away from football in July to launch KNGDM Impact Fund to promote upward mobility through ownership and empowerment in Opportunity Zones in Nashville, Atlanta, Austin and Coatesville, Penn., his hometown.

Keep reading, “Investments in ‘people and places’ start to demonstrate impact in Opportunity Zones,” by Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

LGT acquires Aspada from Soros fund to expand its Lightstone impact investing platform. The $215 billion private banking and asset management firm of the royal family of Liechtenstein took majority control of Aspada, an early-stage venture investor that has made 19 investments in India. LGT acquired the stake from the Soros Economic Development Fund, or SEDF, which had been Aspada’s only outside investor. Terms of the deal were not disclosed. The acquisition will expand LGT’s new Lightstone impact investing arm, which has assets of more than $400 million. LGT’s Prince Max von und zu Liechtenstein told ImpactAlpha that Lightstone (a rough translation of Liechtenstein) will seek to build a multi-billion dollar global impact investing platform. Aspada’s Kartik Srivatsa said LGT Lightstone Aspada will be able to make larger investments in agricultural supply chains, healthcare, education and financial services. “To go to the next level, to be able to expand the amount and type of capital they were able to commit to these businesses, Aspada needed to find other partners to work with,” SEDF’s Sean Hinton toldImpactAlpha. “We are only more committed to finding other Aspadas and building other Aspadas in other parts of the world.” Keep reading.

Quadria secures IFC investment for second Asia healthcare fund.Singapore-based Quadria Capital is looking to raise $500 million for its second fund targeting growth-stage healthcare firms in Asia. Quadria, an impact-focused firm that closed a $300 million healthcare fund in 2014, doesn’t directly target patients at the base of Asia’s economic pyramid, but works with portfolio companies to serve a broader base of customers. A $25 million commitment from the World Bank’s International Finance Corp. follows Quadria’s March close of $194 million for the fund, which included a $150 million commitment from the U.S. Overseas Private Investment Corp. Check it out.

Green Canopy raises $5.1 million to expand net-zero real estate development. The Seattle-based company aims to tackle both the climate and urban housing crises by converting empty and unused urban spaces into energy-neutral homes. Green Canopy has raised $5.1 million in a planned $11 million equity round with backing from 35 impact investors.

Fintech startup Nomanini clinches $4 million to support informal merchants. The South African startup’s platform connects banks, utilities and mobile network providers to informal vendors, who sell mobile airtime, prepaid electricity and other services to locals. South Africa’s Standard Bank and Dutch impact investor Goodwell backed the company.

Blackboard Radio raises seed funds to expand English instruction in India. Impact tech incubator Villgro backed the company to accelerate the reach of its artificial intelligence-based language app to kids in India’s smaller cities.

Agents of Impact: Follow the Talent

Jeff Hilton, ex- of Aura Financial, joins Opportunity Fund as senior vice president of capital markets… Christina Lukeman, ex- of Agora Partnerships, joins MCE Social Capital as senior business development manager… Impala Energy is looking for an ESG manager in London… Pact seeks a project manager of financial inclusion in Dar es Salaam, Tanzania… Roots of Impact’s Bjoern Struewer will lead the Initiative for Blended Finance at the University of Zurich’s Center for Sustainable Finance and Private Wealth.

Thank you for reading.

– Aug. 28, 2019