Greetings from the GSG Summit in Chicago!
#Featured: ImpactAlpha Original
The 2017 GSG Honorees: Proof points for a growing industry. Capital markets don’t build themselves. The past year’s growth in impact investing is a function of the hard work of impact entrepreneurs, asset owners, asset managers and market builders across geographies, asset classes and stages of market-development. The Global Impact Investing Steering Group, or GSG, selected five winners of the first GSG Honors, to be awarded today in Chicago, to stand in for hundreds of partners and allies who together are building the impact investing marketplace.
The honorees “are leading efforts to direct capital and innovation to tackling social and environmental issues, which is fundamental if we are to address the massive challenge facing billions of people across the world,” said Sir Ronald Cohen, chair of the GSG. ImpactAlpha helped recruit and screen more than 150 nominations, which testified to the breadth and depth of talent among the market’s first movers and early adopters. The winners:
Entrepreneur of the Year: Rajeev Kher of 3S India, who is leveraging technology and finance to deliver portable toilets and provide dignified sanitation to millions of low-income people.
Asset Owner of the Year: Christian Super, the Australian pension fund leading institutional investors toward impact investing.
Asset Manager of the Year: The Reinvestment Fund, the Philadelphia-based investor tapping the public bond market for low-income community development.
Field Builders of the Year: Intellecap, the Mumbai-based hub of impact funds, business support and in-person gatherings that support entrepreneurs and businesses serving the “other three billion.” And the Impact Investment Exchange, or IIX, based in Singapore, which is building infrastructure for social capital markets in Asia.
Read, “And the GSG Honors go to… A year of growth in impact investing,” by David Bank on ImpactAlpha:
#Sponsored: Content from Tideline
Making neglected diseases investable with Product Development Partnerships. Impact investing has brought private capital to microfinance, social enterprise and other sectors historically funded through donations. One of the next frontiers for impact investors: global health research and development, according to new research from Tideline, a consultant to clients developing impact investing strategies and solutions. Of the $3.4 billion invested in neglected-disease R&D in 2014, only about $40 million came from investors seeking financial returns. Now, public-private Product Development Partnerships are generating increasing investor interest. More than 15 such partnerships already are working on more than half of the 485 candidates for drugs, vaccines, and diagnostics for neglected diseases. To attract investors, Tideline suggests, PDPs will have to sharpen their investment rationale and work toward investment readiness with their pharma, academic and government partners. Tideline’s deep dive, “Investing for Global Health Impact in Product Development Partnerships,” was produced in partnership with the Bill & Melinda Gates Foundation. Learn more about the opportunity:
#Dealflow: Follow the Money
UBS clients put $325 million into TPG Growth’s Rise Fund. The world’s largest private bank raised the sum from private-wealth clients looking for profitable ways to tackle global challenges like energy, infrastructure, education and agriculture. The Swiss bank has pledged to raise $5 billion for impact investments aligned with the UN’s Sustainable Development Goals. The Rise Fund is aiming to raise $2 billion, which would make it one of the world’s largest private equity funds taking aim at the 2030 global goals. “The interest in impact investing and these kind of opportunities among the clients we speak to actually far exceeds the supply of the available opportunities,” said UBS’s Simon Smiles, chief investment officer for ultra-high net worth clients. UBS said a third of the funds raised were from investors in North America; the remaining came from international clients. Added UBS’s Christian Wiesendanger, “This Rise Fund is one of many to come.”
U.S. commits $50 million to World Bank women’s fund championed by Ivanka Trump. The $1 billion fund to advance women’s entrepreneurship wasofficially announced at the G20 summit in Hamburg this weekend. The Women’s Entrepreneurship Facility was conceived early this year by Ivanka Trump and World Bank President Jim Yong Kim and has drawn support from Germany’s Angela Merkel. It has raised more than $325 million, including pledges from several less-than-obvious backers like the governments of Saudi Arabia and U.A.E., which jointly agreed to invest $100 million. The Trump Administration has pledged $50 million to the fund. Canada, Japan, Australia, Denmark, the Netherlands, Norway, and South Korea have also contributed.
Reliance Capital backs affordable lending startup Billionloans. The Bangalore-based venture is a matchmaking platform between lenders and borrowers of low-cost loans. Financial services firm Reliance Capital has invested $1 million to expand Billionloans’ digital service for small business, affordable housing, education, and personal loans. Technology and innovation are in to “bridging the gap between the aspirations of large number of Indians wanting access to credit and the ability of companies to build efficient and scalable lending models,” says Reliance’s Anmol Ambani. India’s $1.2 billion fintech market is expected to double by 2020. Reliance Capital, based in Mumbai, and has $12.6 billion in assets under management.
UNDP, Australia launch catalytic loan fund for Philippine “SDG startups.”Early-stage social ventures in the Philippines committed to the U.N.’s Sustainable Development Goals can tap close to $2 million from the U.N. Development Programme’s regional Social Impact Fund and the government of Australia. A local bank to issue small loans of up to $150,000. Startups need only have a business “blueprint” to be eligible for a loan and technical support. The purpose is to help social entrepreneurs in the Philippines “grow their operations and attract investments from global and local impact investors.” Repayment timelines for the loans will range from five to six years.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
“If we are going to transform finance, we are going to have to get uncomfortable.” Darren Walker, president of the Ford Foundation, unloaded on philanthropies in general — and Ford’s own trustees. Walker earlier this year carved out $1 billion (over 10 years) out of Ford’s $12 billion endowment for mission-related investments, or MRIs. at the GSG Impact Summit in Chicago, he shared some of the story of a journey he said ‘has been very challenging and uncomfortable for my trustees and my investment committee…who are very conservative.” Trustees told him, “‘We are not doing this. We are not doing this,’” Walker said. Walker set up a parallel investment office because Ford’s investment officer declined to manage the MRIs. When Walker told his CIO he’d love him to become an impact investor, “He had an answer for me.” Walker was even more critical of other foundations who have not yet committed any part of their endowments toward achieving their social missions, two years after the Treasury Department removed legal barriers to such a move. “Philanthropy for the most part has shrugged its shoulders, with the same tired rhetoric about what we’re doing to change the world, without actually changing our own behavior,” Walker said. He hopes the performance of the new investment program will spur more foundations to point their endowments toward impact. “I am confident that we are going to make money,” he said. “I am also confident that we are going to get better at measuring for social impact.”
Investments in sustainable agriculture are investments in the rest of the 2030 agenda. Farms accounts for nearly three-quarters of all water use. Agriculture is both affected by climate change and a significant carbon emitter. The sector employs most of the world’s poor, including hundreds of millions of women. Investments in agriculture are key to reaching many of the Sustainable Development Goals.
And yes, growing food is key to ending hunger (SDG №2). As the United Nations gathers this week at the “High Level Political Forum” to take stock of progress on the 17 goals, Yvonne Harz-Pitre, co-chair of Farming First, a global agriculture coalition, offers some examples of such global goal two-fers. The Sustainable Guar Initiative, for example, has trained 320 women and established 277 kitchen gardens in India, “not only making progress toward ending hunger, but also improving health and promoting gender equality in the household — ticking off two more SDGs in just one intervention,” writes Harz-Pitre.
Protecting the genetic diversity of plant and animal species around the world (SDG №2.5) is important for breeding better crops and animals resistant to the new pests, diseases and temperatures. Groups like the International Maize and Wheat Improvement Center are preserving genebanks for research. Investments in soil health for smallholder farmers in Kenya are sustainably boosting yields and farmer incomes (SDG №2.4).
To help close the $200 billion gap in smallholder finance and boost farmer incomes (SDG №2.3), Vodacom in Tanzania is using data and credit scoring algorithms to boost lending to small holders. Investments in malnutrition (SDG №2.2), especially childhood malnutrition, return $16 for every dollar invested, according to the ONE Campaign.
Onward! Please send any news and comments to [email protected].