Latin America | March 4, 2024

FLII feeds investor optimism and urgency about Latin America’s future

Dennis Price
ImpactAlpha Editor

Dennis Price

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ImpactAlpha, Mar. 4 – Agents of Impact didn’t want last week’s Latin America Impact Investing Forum to end.

The closing celebration spilled over to a hacienda in downtown Merída, where Sonen Capital’s Raul Pomares hosted gatherings throughout the week. The DJ arrived. The mezcal flowed. Deals were sealed, or at least toasted.

Spotted at the after-party: FLII hosts Rodrigo Villar and Carolina Puerta, ImpactAssets’ Tim Freundlich and Toniic’s Dipti Pratt, Maria Hollan of Timke Ventures and Juanita Alvarez of PVBLIC Foundation, Sonen’s Sandra Sainz, and New Ventures’ Sebastián Welisiejko. Optimism about Latin America’s impact economy rose with the morning sun.

“I feel super optimistic and full of energy,” Welisiejko, who recently joined New Ventures to lead its office in Buenos Aires, told ImpactAlpha in a video interview. Welisiejko cautioned his optimism by noting Latin America’s “terrible” progress on the Sustainable Development Goals.

“Monday, when we go to our work, hopefully everyone here, whether you’re an investor, entrepreneur or a big corporate, will walk out of FLII really conscious that the urgency is there like never before.”

Wary reception

Nature-based solutions can deliver both social and environmental benefits and steady cash flows. But São Paulo-based Vox Capital’s regenerative ag fund failed to gain traction. Brazilian investors generally still regard impact fund structures as riskier than legacy investments.

Vox, with over $250 million in assets under management, is relaunching the nature-based solutions strategy as a debt fund for enterprises working in the bioeconomy, forest restoration, pasture renovation, and the economic development of smallholder farmers.

The new approach is “grounded in blended finance and aims for leaner structures to attract funders,” Vox’s Daniel Brandão told ImpactAlpha.

Separately, Regenera Ventures has raised roughly $4 million of its target $20 million fund to invest in regenerative land projects in Mexico and expects a first close by year-end.

Brazilian beat

FLII participants welcomed the increased presence of Brazilian Agents of Impact. As Brazil assumes the presidency of the G20 presidency, President Luiz Inacio Lula da Silva’s administration has greenlit the nation’s impact economy.

“Brazil is back,” Lucas Ramalho, one of the Brazilian officials behind the country’s National Impact Strategy, told ImpactAlpha. “Brazil is willing to help to fight climate change and to promote a more equitable world with less poverty and less inequality.”

ImpactAlpha sat down with Ramalho and other newly energized Brazilian leaders, including PretaHub’s Adriana Barbosa, BlackWin’s Jéssica Rios, Lucas Conrado of Estimulo, Potencia Ventures’ Itali Collini, Cristiana Penteado and Laura Gontijo of Blue Like an Orange, Rodrigo Saad Horpaczky of Artemisia and Vitoria Junqueira and Ricardo Ramos of Aliança pelo Impacto, a partner in the launch of ImpactAlpha Latin America

Mobilizing capital

Dealmakers made time for meetings as well as parties in Merída.

Battling a venture capital correction in Latin America, managers who are actively raising capital to invest in the region include El Salvador-based Innogen Capital, Impaqto in Ecuador, Amazonia Impact Ventures in the UK, Savia Ventures in Mexico, EWA Capital in Colombia, Estímulo in Brazil, in Paraguay and New York-based Winnipeg Ventures. Bogotá-based Alive Ventures took home an Ignite Award from the conference.

Sonen Capital, Community Investment Management and Sorenson Impact Foundation all told ImpactAlpha that they’re increasing allocations to Latin America. European bankers including Borja García Fernández of UK-based Citi Social Finance and Rafael Matos of Spanish development bank COFIDES made the case for investing through local intermediaries.

Jay Dunn of Washington DC-based family office DF Impact Capital has built a portfolio of nearly two dozen indirect and direct investments in Latin America and the Caribbean, including New Ventures’ Viwala fund and Fonkoze in Haiti.

Visa Foundation has allocated $35 million in grants and investments in the region, including in women-led funds like EWA. “The ecosystem is buzzing,” Visa’s Najada Kumbuli told ImpactAlpha. “We’re looking for opportunities and there are a lot here.”