The Brief | January 29, 2019

Exclusive: Ross Baird’s Blueprint for local investing, Kenya’s rural Amazon, raising affordable housing funds

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Blueprint Local: Texas fund is a blueprint for investors betting on their hometowns – and the businesses that are bringing them back. Helping local investors invest in local entrepreneurs to revive local communities is harder than it should be. Ross Baird, the founder of Village Capital, has formed Blueprint Local to assemble the pieces for such local entrepreneurial revivals. Today, he is launching Blueprint Texas, the first in a planned series of geographically focused investment funds of $50 to $100 million each – large enough to attract capital, but local enough to drive impact. “The average person with wealth in a community doesn’t have meaningful ways to invest their wealth in the community,” Baird, who is stepping back from his day-to-day role at Village Capital, told ImpactAlpha. “We need to connect asset management and community engagement.” (See Agents of Impact, below, for news about Village Capital’s new CEO, Allie Burns.)

Blueprint Texas aims to invest in clusters of real estate projects and operating businesses in the Austin-San Antonio corridor. The fund is structured as an “Opportunity Fund” to take advantage of capital-gains tax breaks for investments in designated low-income neighborhoods. Partners include Admiral Capital, the $1.4 billion real estate and private equity firm co-founded by former San Antonio Spurs star David Robinson, and Brown Advisory, a wealth manager with more than $70 billion in assets under management. Also on board: Access Ventures and Rethink Community. “This isn’t a one-off real estate project in Austin,” says David Robinson Jr., Robinson’s son, who leads Admiral’s social impact investing. “We’re in it for 10 years and we’re incentivized to see community growth.”

Read, “Blueprint Local: Texas fund is a blueprint for investors betting on their hometowns – and the businesses bringing them back” by Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

Copia clinches $2 million to be Kenya’s “rural Amazon.” Copia delivers items to its 150,000 customers within several days through a network of 3,000 agents across a delivery region that includes nearly a quarter of rural Kenyans. The e-commerce venture, launched in 2013, aims to make it as convenient for emerging market consumers to access goods as it is for wealthier consumers in advanced economies. Dutch impact investor Goodwell backed the company through its uMunthu fund, which invests in African startups targeting financial inclusion, fintech and inclusive growth. Learn more.

Indian startup Groww raises $6.2 million to help millennials invest. The Bangalore-based online investment platform claims to have a million registered users, who can use Groww’s app to invest very small, recurring amounts in more than 5,000 different mutual plans. Groww launched in 2017 to make it easier for young people in India to invest. “There are 200 million people with investable income in India, but only 20 million investors,” Groww’s Lalit Keshre said. “The only way to bring the next 180 million on board is by making investing simple.” Sequoia India, Y Combinator, Propel Venture Partners and Kauffman Fellows backed the company’s Series A round. Here’s more.

Signals: Ahead of the Curve

Affordable and workforce housing are among the most stable asset classes in real estate. With long waiting lists, low vacancy rates and stable tenants, affordable housing is a low-risk, long-term investment. Big, corporate-backed affordable housing funds are grabbing headlines (see, “The key to new $500 million affordable housing fund? A $40 million grant from Facebook’s founder”). But lower-profile partnerships, funds, and deals have grabbed more total capital in the first 30-days of 2019. Some of the recent dealflow in affordable housing:

  • Preservation. In New York’s South Bronx, NCV Capital Partners, Mount Hope Housing Co., Lemor Development Group, and the Community Preservation Corp. are pouring $100 million into preserving 515 units of affordable housing… Virginia-based real estate firm Middleburg has reached the first close on a planned $75 million fund to acquire, rehab and manage distressed workforce housing in the U.S. Southeast and Mid-Atlantic… Goldman Sachs’ Social Impact Fund committed $15 million to a new fund by New Jersey Community Capital to build, acquire and rehab low-cost housing in New Jersey.
  • Housing as healthcare. Non-profit healthcare giant Kaiser Permanente and Enterprise Community Partners formed a $100 million loan fund to build and preserve low-income rental housing as a way to improve community health across Kaiser’s eight-state (plus D.C.) network area. Separately, the first investment from Kaiser’s $200 million Thriving Communities Fund is a 41-unit complex in Oakland, Calif…. And Enterprise launched a five-year, $250 million initiative to foster greater integration between health and affordable housing.
  • Global challenge. French public-finance institution Caisse des Dépôts raised a whopping €900 million ($1 billion) from 15 institutional investors towards a planned €2 billion fund to build middle-income housing in Paris and other French cities… CBRE Global Investors has raised £250 million ($329 million) towards its U.K. Affordable Housing Fund, with backing from 13 investors including Big Society Capital. The fund will invest in social and affordable rental housing, worker housing and homeless hostels across the U.K… Also in the U.K., Cheyne Capital is backing a £40 million project to build 379 new affordable housing units on a restored brownfield site in Stoke-on-Trent in northwest England… The Social Impact Investing Initiative of the U.N.’s Office for Project Services (UNOPS) is partnering with the Kenyan government to corral private capital to develop 100,000 new affordable homes across the country.
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Agents of Impact: Follow the Talent

Allie Burns is the new CEO of Village Capital, moving up from managing director. Victoria Fram continues to lead VilCap Investments, Village Capital’s venture fund. Ross Baird will remain on Village Capital’s board as he launches Blueprint Local (see above)… Jennifer Anderson and Nikita Singhal have joined Lazard Asset Management as co-heads of sustainable investment and ESG… Veris Wealth Partners is hiring a chief operating officer in San Francisco and a senior wealth manager in New York.

January 29, 2019.