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#Featured: ImpactAlpha Original
Readying an impact IPO on the London Stock Exchange. The prospectus for one of the world’s first publicly listed impact investment companies has a long list of risk factors that would be daunting — if they weren’t much like the risk factors for all other initial public offerings. The Impact Investment Trust, which will be listed on the London Stock Exchange in the next couple of weeks, will be one of the few emerging-market impact investment opportunities available to individual small investors. It is seeking to raise $150 million to invest in about a dozen underlying funds targeting small- and medium-sized enterprises in “high-impact” sectors in low-income countries. The IPO prospectus offers a glimpse of a future in which impact strategies and impact measurement — and impact risks — are routine parts of many such offerings available to retail investors.
Keep reading “Impact Investment Trust opens emerging-market impact investing to retail investors,” by David Bank on ImpactAlpha:
#Dealflow: Follow the Money
Nigerian agriculture gets $31 million boost, but don’t call it an impact fund. The Nigerian government launched its Fund for Agricultural Finance in Nigeria in 2014 to draw private investors into smallholder agriculture. New backing from the African Development Bank, DFID Impact Fund, and Dutch Good Growth Fund brings the fund’s total pot to $66 million. The fund is managed by private equity firm Sahel Capital and backed by development banks and agencies. FAFIN makes “quasi-equity” investments structured as debt, which have the potential for higher returns. The fund has made four investments to date that support 1,000 small farmers and their families. It is not marketed as an “impact fund,” said Dalberg’s Joe Dougherty (p. 8), who helped structure the fund. “By definition, FAFIN will have an impact, but the feeling was that advertising it as an impact fund would lead to misaligned expectations about returns and investment criteria.”
Chan Zuckerberg Initiative invests in affordable housing for teachers. Mark Zuckerberg believes in “personalized learning” and wants kids to teach themselves (through software Facebook is helping develop). But teachers will have a role, too, so Zuckerberg’s LLC is making a $5 million investment in Landed to help teachers buy homes in the Bay Area’s high-priced housing market. Landed generally contributes up to half of a 20% down payment to help local teachers buy a home, and takes 25% of the gain when the home is resold. The Chan Zuckerberg investment is expected to support 50 teachers. The booming tech sector has driven the cost of homes beyond the reach of most teachers, to $750,000 in Redwood City and $1.3 million in East Palo Alto. (If you have to ask about Palo Alto, you can’t afford it.)
CirrusMD raises $7 million for Colorado telemedicine. Virtual healthcare services are a growing market, as technology enables remote care. CirrusMD, with 1.3 million patients on its platform, works with large health providers to connect with patients via text message and video. CirrusMD’s remote care model aims to reduce healthcare costs for low-level health plans in Colorado. The $7 million Series A financing was led by Colorado Impact Fund in its first digital health investment.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
Five avenues for economic mobility in America’s cities. More than 100 million people, or about a third of the U.S. population, live at or below 200% of the federal poverty line of about $28,000 for a family of four. Executives from Mastercard, the digital payments giant, and Mastercard Center for Inclusive Growth, met with civic and business leaders in U.S. cities last year to find ways to remove barriers to opportunity and growth in the U.S. The takeaways: support local entrepreneurs, skill up the workforce, unlock data for impact, increase urban mobility, and stabilize workers in the gig economy. Mastercard is taking action with three initial grants: to Accion, to test the resiliency of small businesses to financial shocks; to PolicyLink, to profile workforce trends impacting America’s poor; and to the Urban Institute, to create new indicators of inclusive growth. Mastercard has also struck two other partnerships that are noted in the report: with Grameen America, to scale U.S. microfinance and with DataKind, to build the data analytics capacity of nonprofit organizations.
Open Mic: The trouble with the 2030 global goals. Investors, philanthropists and development practitioners are adopting the 17 U.N. Sustainable Development Goals as a framework for action on a range of social, environmental and economic issues. What could possibly be wrong with that? Laura Ortiz, co-founder of SVX Mexico, thinks it’s time to check this thesis. “The Sustainable Development Goals largely ignore the causes of our most pressing challenges in favor of addressing only the symptoms,” Ortiz writes on ImpactAlpha. Instead of “ending extreme poverty,” how about “ending extreme wealth?” Rather than a goal of “reducing unemployment,” what if we targeted “reducing consolidation?” Ortiz offers a manifesto for improving the the SDGs. As we invest trillions of dollars in sustainable development, she says, let’s tackle the root causes of the problems we’re trying to solve. What do you think? Join the conversation about “The trouble with the 2030 Global Goals,” by Laura Ortiz on ImpactAlpha:
Onward! Please send any news and comments to TheBrief@impactalpha.com.