How five women-led funds in South Africa are unlocking capital for women and small businesses. Too little capital is making it into the hands of women entrepreneurs and business owners in emerging markets. One solution for gender-lens fund managers: band together to strengthen the value case for investing in women, and for why institutional capital should rally behind them. “We’re seeing a lot of collaboration between women-led funds and angel investors, which is developing the value chain,” says Julia Price of South Africa-based Linea Capital, which provides revenue-based, non-dilutive capital alongside other gender-lens funds to meet businesses' diverse capital needs. Price is among growing cohort of first-time fund managers ushering addressing persistent capital gaps for women in business. From Cape Town, ImpactAlpha’s Jessica Pothering reports on the tools South Africa’s female fund managers are using, from local market knowledge, to creative partnerships, to flexible, founder-friendly forms of finance.
Dealflow: Climate Finance
Barbados’ debt-for-nature swap unlocks $50 million to protect nature and build resilience. Barbados is the latest nation to restructure its high-priced debt to free up funds for conservation. The Caribbean island will buy back a portion of its higher-priced sovereign debt with $150 million in lower-interest loans arranged by Credit Suisse and CIBC FirstCaribbean. Loan guarantees came from The Nature Conservancy and the Inter-American Development Bank. The $50 million savings will go into a conservation trust fund that will make grants to protect coral reefs, manage stormwater runoff and pursue other conservation efforts over 15 years. Island nations, among the most vulnerable to climate-driven extreme weather events and rising sea levels, also have some of the highest debt-to-GDP loads, in part due to storm-related damages. When the Covid pandemic tanked tourism revenues, many countries had little left to spend on conservation and climate adaptation.
Impact Voices: Returns on Inclusion
How asset managers are digging in on diversity to stand out from their peers. ESG begins at home. As growing numbers of investors look for environmental, social and governance-based investment opportunities, they are looking more closely at the ESG attributes of asset managers themselves. That includes managers’ records on diversity, equity and inclusion, or DEI. The U.S. Securities and Exchange Commission has indicated to asset managers that disclosures of human capital, including DEI, are likely to follow its proposed climate change disclosure regulations. “Managers should make it a priority to get ahead of these developments while DEI is still emerging as a priority for investors and regulators,” Taleah Jennings of law firm Schulte Roth & Zabel writes in a guest post.
Agents of Impact: Follow the Talent
The U.S. Biden administration launches an environmental justice office to distribute $3 billion in block grants to tackle pollution in underserved communities in the U.S… HSBC has added senior talent at its new Sustainability Center of Excellence, including Justin Wu, ex- of BloombergNEF, as co-head of climate change for the Asia-Pacific region; Milo Sjardin, also ex- of BloombergNEF, as managing director and head of climate analytics; and Susannah Fitzherbert-Brockholes, ex- of PwC, as director of sustainable finance.