2030 Finance | October 7, 2017

Getting talent right, $150 million for diversity in films, Connovo’s replication innovation, Puerto…

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Greetings, ImpactAlpha readers!

#Featured: Impact Voices

Securing the talent to scale impact. When Ryan Grant Little managed social entrepreneurship and finance efforts at the BMW Foundation in Berlin, he noticed organizations lacked basic skills like strategy and finance. “Organizations in the sector were failing to attract and retain talent with some of the hard skills that are absolutely fundamental to succeeding and scaling,” he realized. Now Little has teamed up with friends at UnLtd in the UK to launch the Talent Project.

His proposal: Recruit unusual suspects and pay more, says Little, a principal at Berlin-based consulting firm RGL Strategic. “I will choose a lean, well-paid team over an army of poorly paid workers any day,” he writes in a Talent Project post on ImpactAlpha. “We need to get the best minds working on the colossal problems we are facing globally…The generation that is now coming of leadership age recognises that purpose is more important than profit. Now let’s work hard to enable that generation to take its best shot.”

Read Ryan Grant Little’s “Five ideas for getting talent right,” on ImpactAlpha:

Five ideas for getting talent right

#ICYMI: Brief Highlights

Nine out of the 10 largest U.S. asset managers are now active in impact investing. The biggest asset managers appear to be the first movers, according to a new analysis from impact-investing strategy firm Tideline. Among the top 20 U.S. asset managers, Tideline found half have impact strategies or are actively exploring them. Learn why. (Read more)

Major asset managers moving slowly but surely toward impact investing

Puerto Rico’s agony makes the case for climate-resilience investing. Distributed renewable energy, protected watersheds, storm-resistant roofs and restored reefs and mangroves. In Puerto Rico, America could have its very own large-scale testbed for climate-resilient 21st century infrastructure. Elon Musk is game (see #2030 below). (Read more)

Puerto Rico’s agony makes the case for climate-resilience investing

Morgan Simon’s new book challenges investors and activists. The longtime leader in the field bridges two worlds with her new book, “Real Impact: The New Economics of Social Change.” The opportunity to transform finance is massive, she tells social activists. For real impact, she advises impact investors, engage with on-the-ground communities and grassroots activists. (Read more)

Real Impact: Bringing communities into impact investing (podcast)

#Dealflow: Follow the Money

Fences producer MACRO raises $150 million to diversify film. Impact investing has been called out for not supporting the arts. Here’s a counterexample: Emerson Collective, Ford Foundation, Kellogg Foundation, and Libra Foundation have invested in a $150 million round for MACRO, producer of the Oscar-nominated film, Fences. The media company develops programming that “authentically represents the multi-faceted spectrum of our communities,” says founder Charles King. The company has two films slated for release in November and another for 2018; all of its productions feature people of color in the lead roles. “One of my goals while I am still in the industry is to dispel this notion that movies that have people of color in them, that they won’t work. Because it’s just not true,” King told The Hollywood Reporter. Fences grossed $64 million and lead actress Viola Davis won an Oscar. It’s forthcoming Mudbound was the biggest sale at this year’s Sundance Film Festival — to Netflix for $12.5 million. Emerson was MACRO’s original investor.

Jonathan Rose Cos. closes $233 million affordable-housing fund. The New York firm, which invests in green and community real estate, has secured $233 million for its fourth Rose Housing Preservation Fund to acquire affordable properties and make energy efficient upgrades. The properties will include classrooms and health and social services. The company has already invested $64 million from the fund, including buying a portfolio of 3,300 government-assisted housing units. The Ford Foundation, Deutsche Bank’s Community Development Finance Group, non-profit health provider Providence St. Joseph Health, and Nuveen (TIAA’s recently renamed asset management group), invested in the fund. As many as 19 million U.S. households pay more than half their income on housing.

GreenTec Capital raises €1 million for African startups. The Frankfurt, Germany-based impact investor has built a portfolio of 10 companies since 2015, including Nigerian agriculture platform Farmcrowdy and Rwandan Wi-Fi provider ARED. The latest €1 million ($1.2 million) in fundraising will help it reach its goal of backing 50 African startups by 2020. GreenTec works with companies to “define clear and measurable goals that, once reached, translate into a small equity stake. We only profit if our partners profit, and we share the risks as well,” says GreenTec on its website. The company is backed by Finance in Motion and several Europe-based angel investors. It plans to launch a full-fledged impact fund next year.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#Signals: Ahead of the Curve

Replication is Connovo’s innovation for improving education in Mexico. For many challenges, solutions already exist. When a student at a Hipocampus learning center in Mexico attends a high-quality, company-funded preschool, parents probably won’t care that the model has been borrowed from India. “We believe if you do social enterprise, you are here to solve problems. It doesn’t matter if it’s your idea,” Nicolas Demeilliers, co-founder of Connovo, told ImpactAlpha. Connovo, a Mexico-based “replicator,” plans to expand Hipocampus centers to 100 sites in five years. Rather than “reinvent the wheel,” Connovo aims to scale what works with management talent, mentoring, financing and shared business services. Structured as a holding company, Connovo owns equity in its portfolio companies and provides hands-on operational help. The company intends to build and replicate a half-dozen impact ventures focused on education, in line with Sustainable Development Goal №4 (“Ensure inclusive and quality education for all”). Read David Bank on Connovo’s replication innovation, on ImpactAlpha:

Replication is Connovo’s innovation for improving education in Mexico

#2030: Long-termism

Best-case scenario for Puerto Rico’s 2030 electricity infrastructure. Way back in 2017, Puerto Rico’s electric grid was a mess. A dozen years later: the island has universal, abundant, clean and cheap electricity. While devastated in the short term, Puerto Ricans turned Hurricane Maria into an opportunity to rebuild its electricity infrastructure on a 21st century model. Leapfrogging the archaic electricity infrastructure still in use in some parts of the world, Puerto Rico now has universal, clean, cheap and resilient electric service with the kind of hybrid networked mini-grids now in use around the world.

Granted, that’s a best-case scenario for 2030. Is it likely? Perhaps not. But is it possible? Consider:

Puerto Rico’s utility company, PREPA, was bankrupt even before the storm. When Maria knocked out most of PREPA’s poles, plants, and substations, the electricity infrastructure had to be rebuilt one way or another. In stepped a variety of non-state actors, such as Tesla’s Elon Musk, who offered to do what he had done for the Samoan island of Ta’u, where 60 Tesla Powerpacks powered the island for three days without sun. Musk had also jumped into an urgent situation in Australia, rashly promising to deliver storage for 100 megawatts of battery-power storage in 100 days, or write off the approximately $66 million cost. He delivered.

The plummeting cost of battery storage was key. Also important was new technology that enabled a single storage system to provide a wide range of services, such as charging vehicles and powering homes. With the growth in storage, microgrids proved to be flexible, responsive systems that communities — in Puerto Rico, other island nations, and many parts of sub-Saharan Africa, South and Southeast Asia — could quickly install and own to provide their own power. In the U.S. alone in 2030, 150 million people in the U.S. were expected to obtain power from mini-grids, according to the International Renewable Energy Agency.

That’s a wrap. Have a great weekend! Please send news and comments to [email protected].