Greetings, ImpactAlpha readers! Impact is tough. If you’re in the U.S., we hope the long weekend provides a much-deserved break. We’re taking one! ImpactAlpha will be back after the Memorial Day holiday with a new morning edition of The Brief.
– The ImpactAlpha Team
The Brief’s Big 10
1. The Impact Alpha: Impact investing’s theory of change. In this week’s column, David Bank ponders whether impact investing is more than just a series of deals. “I’m no economist, but it seems as if the propositions impact investors are testing at least point toward a new paradigm.” As impact worms its way into the financial machinery, the markets are shifting. Can impact investing move ‘beyond neoliberalism’? Riff of the week.
2. A funding ecosystem emerges for refugee and migrant solutions. Some see refugees and other migrants as liabilities. A growing group of investors and entrepreneurs see assets: customers, talent and next-gen leaders. A new Refugee Investor Network aims to unlock at least $1 billion in refugee-focused investment by 2030. Get smart quickly.
3. Prudential Financial may be the biggest impact investor you’ve never heard of. The insurance company has backed the climate finance firm MyStrongHome, Washington D.C.’s $25 million environmental impact bond and a social impact bond in Massachusetts for workforce development. It has a $350 million partnership with LeapFrog Investments, the emerging markets financial services investor, and a $1 billion commitment to its headquarters city of Newark, New Jersey. Prudential’s Lata Reddy joined ImpactAlpha’s Returns on Investment podcast to talk corporate impact. Read on and listen in.
4. Abraaj health fund, meet TPG’s Rise Fund. The Abraaj Growth Markets Health Fund was a high-profile demonstration of ‘SDG finance.’ Then investors started asking questions about Abraaj’s financial management. Now, TPG’s Rise Fund is talking with investors about taking over the $1 billion fund, the Wall Street Journal reports. The Rise Fund declined to comment, as did the Bill & Melinda Gates Foundation, a major investor. The backstory.
- Get to know the Rise Fund: A Q&A with CEO Bill McGlashan.
5. Deals of the week. Drink from the deal firehose all day onImpactAlpha.com. Here’s a roundup of the best:
- Fund raises: CDC and Standard Chartered stand up a $100 million fund for post-Mugabe Zimbabwe… Kaiser Permanente to invest $200 million in housing-as-healthcare initiatives… Town Hall Ventures seeks a “massive and necessary shift” in health care for low-income Americans… New Markets Venture Partners raises $68 million to bridge skills gaps.
- Returns on inclusion. Connxus raises $2 million to help corporations diversify supply chains… Calvert and Urban Advisors raise a $12 million loan fund for entrepreneurs of color in the southeast U.S.
- Corporate impact VC. Workplace-safety venture PRYSMEX gets corporate venture funding from Cemex… BP Ventures backs StoreDot and its fast-charging battery technology.
- Well-being investing. Three deals span the lucrative “Longevity Economy”… OPIC loan helps Dimagi expand health-care managementin Tanzania, Myanmar and Guatemala.
6. Inside the portfolios of impact investing’s 100% network… Seventy-six asset owners (including six with assets of $30 million or more) opened up their books for a new report from the Toniic investor network. All have committed to moving 100% of at least one of their portfolios to impact investments. The takeaways.
7. …and the portfolio of the KL Felicitas Foundation. Two mainstays of the Toniic network, Lisa and Charly Kleissner, have documented the financial and social performance of their KL Felicitas Foundation. More than 99% of the foundation’s $9.5 million assets were allocated toward responsible, sustainable and impact investments by the end of 2016. Solid impact, modest returns.
8. Helping smallholder farmers in Africa move up the food value chain.With millions or small farmers and thousands of businesses in the food value chain, “huge social and financial opportunities emerge for impact investors,” writes Gaita Kariuki of Selina Wamucii, a Nairobi platform for sourcing fresh produce. The key to boosting both livelihoods and food security? Stronger ties between smallholder farmers and small- and medium-sized food processors, Kariuki argues in a guest post on ImpactAlpha. It’s about market access.
9. Impact investors struggle to find a role in China. China has something some other countries are missing: national policies for driving environmental and social impact. But private investing in social impact is a concept that has been hard for many to grasp. “They have a wait-and-see attitude,” says Dao Ventures’ Tao Zhang. “They want to see the results.” Letter from Shenzhen.
10. Can artificial intelligence boost global financial inclusion? Kenya’s Branch and Tala are using data from phones to provide mobile credit. In South Africa, bank customers are getting AI-powered nudges toward healthier financial behaviors. A wonky new report shows how financial service providers in Africa are wielding AI to gain an edge with low-income populations. Augmentation, not replacement.
— May 25, 2018.