Greetings, Agents of Impact!
Welcome to this week’s ImpactAlpha LP/GP, where we take you inside the real business of impact investing and the dynamic relationships between owners, managers and intermediaries of impact capital.
☎️ Today’s Call: Shaping the algorithm for ‘good AI.’ “Early system-design choices around data control, model dependency, interoperability and accountability are increasingly shaping downstream outcomes that affect not just individual companies but entire portfolios,” writes Project Liberty Institute’s Paul Fehlinger. Fehlinger will join Katy Knight of Siegel Family Endowment, Mohamed Nanabhay of Mozilla Ventures, Omidyar Network’s Chris Jurgens, and other (human) Agents of Impact to sketch an emerging investment thesis around “good AI.” The call kicks off ImpactAlpha’s “Shaping the Algorithm” beat, in partnership with Siegel Family Endowment. Answer the Call, today, Feb. 18, at 10am PT / 1pm ET / 6pm London. RSVP for login details.
In this week’s newsletter:
- Supporting GPs after the raise
- Lightrock’s exit in India
- Catalytic capital for European social enterprises
- Local guarantees for emerging market infrastructure investors
Featured: Portfolio Management
How impact LPs are supporting fund managers long after the raise. Gary Community Ventures has been working its local wealth building strategy in Colorado for decades, backing innovative fund managers like Dearfield Fund, Kah Capital Management and Apis & Heritage. It’s after the check clears that Gary really goes to work. For each leg of its strategy, Gary has a public policy agenda to mobilize public capital to scale up proven solutions. This month, Colorado renters for the first time will be able to earn cash back for rent payments and share in the appreciation of their properties, thanks to Prop 123, a first-in-the-nation program that Gary helped bring into law. Last month, ImpactAlpha rounded up 10 ways LPs are going beyond the check to support fund managers. LPs providing post-raise portfolio support included Melinda French Gates’ Pivotal Ventures and insurance giant MassMutual. Both are introducing managers to other LPs and using social capital to elevate managers’ work, among other strategies. “We think of our investment as just the beginning of a long-term partnership,” Pivotal’s Erin Harkless Moore tells ImpactAlpha.
- Policy levers. The groundwork for the Colorado Renter Rewards program, a so-called “tenant equity vehicle,” was laid by Gary in 2022, when Gary helped pass the state’s first comprehensive affordable housing ballot measure. Last month, Fall River Village, a 66-unit building in the northern town of Estes Park, became the first property to join the tenant equity program. Colorado Gov. Jared Polis said the program will help Coloradans “live close to jobs, schools and in the communities we love while saving money and helping renters build equity.” It could also benefit managers such as Dearfield, a Gary-incubated fund that provides down-payment assistance and shared appreciation to first-time homeowners who have faced systemic barriers; Kah Capital, which buys stressed mortgages and restructures them so people can stay in their homes, and community lender Enterprise Community Partners. Blue Haven and other LPs last year stood up Policy-Enhanced Impact Investing, a community of family offices and other impact investors that are leaning into advocacy, lobbying and politics as key components of portfolio management.
- Ownership economy. Last year, Gary’s advocacy arm also helped shepherd legislation to tap profits from Colorado’s $1.7 billion public school permanent fund to support downpayment assistance for educators to buy homes in the communities where they work. It also lobbied for Colorado’s capital gains exemption for employee-owned company conversions – a possible boon for GPs such as Apis & Heritage. For each of its four ownership themes, “we have something mapping on the policy front,” says Gary’s Catherine Toner. Gary, a foundation-cum-B Corp. founded by Sam and Nancy Gary, is designed to sunset by 2035, transferring all its resources to the community. In addition to its policy support for managers, the place-based investor has also backed the GP Runway Fund, launched by Denver-based Catalyze, to make working capital loans to underrepresented US fund managers.
- Keep reading, “How impact LPs are supporting fund managers long after the raise,” by Erik Stein and Amy Cortese.
Dealflow: Impact Exits
Lightrock grabs an exit opportunity from Indian small business lender Aye Finance. Gurgaon-based Aye Finance is a long-standing darling of India’s impact investing scene. The 12-year-old small business lender was early to develop an alternative credit scoring approach to improve access to credit for India’s underbanked small businesses. Its initial public offering last week is giving its investors a long-awaited opportunity to exit. Lightrock, the London-based impact investing group launched by Prince Max of Liechtenstein, announced a partial exit from the company. Lightrock has been an investor in Aye since leading its $10 million Series B financing round in 2016. Aye has 560 branches throughout India, and makes about $450 million in loans each year. “Lightrock has witnessed how their innovative approach to lending has unlocked economic opportunity for thousands of underserved businesses across India,” Lightrock’s Samir Abhyankar said in a statement. One of Aye’s earliest backers, Accion Venture Lab (now Accion Ventures) exited in 2018 when Aye raised its Series C round. Other Aye investors include equity investors British International Investment and ABC Impact, and debt investors FMO, Symbiotics, responsaAbility, BlueOrchard, Triple Jump and MicroVest.
- Going public. Shares of Aye Finance fetched 129 rupees ($1.42) in the IPO on the National Stock Exchange, India’s largest exchange, and the Bombay Stock Exchange, its oldest. They’re now trading at between 136 and 137 rupees on both exchanges. Emerging market impact investors haven’t seen many exits via public listings. Last month, Nigeria-based infrastructure credit firm InfraCredit provided its founding investor, PIDG, an exit after it listed on Nigeria’s NASD OTC Securities Exchange (see below). In 2024, food and agriculture investor Africa Eats listed on the Stock Exchange of Mauritius, along with two of its portfolio companies. The deal aimed to give growing African companies, which struggle to secure financing through banks and other private channels, access to the much bigger public markets.
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Swiss-German impact fund offers patient capital for Europe’s early impact ventures. Switzerland-based CHI Impact Capital and Germany-based Fase are partnering on a new fund for European impact ventures needing patient capital. The European Catalytic Impact Investing Fund, or ECIIF, will make equity and mezzanine investments in early-stage impact ventures in northern Europe, focusing on education, employment, healthcare, food and agriculture, the circular economy and climate action. The partners are looking to raise €80 million ($95 million) to write checks of €1 million to €3 million each. ECIIF builds on the European Social Innovation and Impact Fund, which Fase launched in 2021 with a guarantee from the European Investment Fund to encourage investors to support early-stage social enterprises. The new fund is also anchored by a €10 million guarantee from the EIF. “The core idea is to expand the universe of financeable impact ventures and make ventures that don’t follow the traditional VC profile financeable,” Fase’s Markus Freiburg told ImpactAlpha.
- Blind spots. In Europe’s startup scene, “there has been a strong focus on technology-focused innovation only,” Freiburg said. “We want to expand that to fund social innovation, which often also has a technological component.” Unlike traditional VC funds, ECIIF will focus on social enterprises “that have organizational models that are not geared toward a sale of the company,” such as student ownership models, cooperatives or hybrid models. “There are a lot of impact ventures that are not following exponential growth, and they need more patient capital, but they can still build significant, profitable business models,” Freiburg said. He added that ECIIF has commitments from public banks, foundations and family offices, but declined to name the fund’s LPs.
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Dealflow overflow. Investment news crossing our desks:
- Women-led First Circle Capital, a first-time fund manager that invests in inclusive fintech businesses in Africa, secured backing from the Dutch Good Growth Fund. (DGGF)
- Spain’s state-run investment group COFIDES is the latest investor in France-based Phitrust’s €60 million ($71 million) Partenaires Inclusion fund for Europe’s small and mid-sized social enterprises. (COFIDES)
- The infrastructure groups at EQT and Blackstone acquired Urbaser, a Spanish waste management and environmental services company, from private equity firm Platinum Equity. (EQT)
GP Snapshot: Infrastructure in Africa
Local guarantees for local investors in infrastructure projects in Africa and Asia. Misperceived risks are among the biggest obstacles to the mobilization of private investment for infrastructure in Africa and Asia. Such mispriced risks spell opportunity for investors that know how to underwrite investments in projects like solar mini-grids in Nigeria, mobile telecommunications in Senegal, and electric motorbike production in Vietnam (see, “Emerging market debt investors debunk risk myths”). “I probably spend half of my time dispelling the myths around risk perceptions,” says Philippe Valahu of London-based Private Infrastructure Development Group. He tells ImpactAlpha that PIDG’s loss rates are less than one-tenth of what ratings agencies would have predicted, with recovery rates “as good as you’re going to get in Europe or North America or better.”
- Credit enhancement. Emerging Africa and Asia Infrastructure Fund, a PIDG company, provides long-term debt for private infrastructure projects in renewable energy, social infrastructure, transportation, agriculture and digital communications. PIDG subsidiary GuarantCo provides credit enhancement and currency guarantees to crowd in private investment for infrastructure projects in emerging markets. It launched a family of domestic versions of GuarantCo to draw in local capital. PIDG launched InfraCredit in Nigeria in 2017, InfraZamin in Pakistan in 2020, and Dhamana in Kenya in 2024. That strategy has proved prescient with the reduction in foreign aid and the decimation of USAID, which had co-guaranteed some projects. PIDG scored an exit last month with the $26 million sale of its preferred shares in InfraCredit after InfraCredit went public on a Nigerian stock exchange. The PIDG team described it as “a strong return despite challenging macroeconomic conditions.” PIDG continues to hold common shares in InfraCredit.
- Keep reading, “Local guarantees for local investors in infrastructure projects in Africa and Asia,” by Lucy Ngige.
Agents of Impact: Follow the Talent
Miguel Silva is promoted to sustainable investments manager at the California pension fund CalPERS… Christina Lukeman, formerly with MCE Social Capital, joins Climate Breakthrough as director of philanthropy partnerships… Parker Hughes leaves ReGen Ventures to become a principal with Mana Ventures… Jennifer Trivelli departs Mission Investors Exchange, where she served as senior director of communications and marketing.
Shalaka Joshi, formerly with the International Finance Corp., joins UNICEF’s global innovation office… Casey Johnson joins the Flexible Capital Fund from RSF. She takes on the role of fund manager… Boston Impact Initiative promotes Aliana Pineiro to chief impact officer, and Keyur Patel to director of portfolio management and programs… Paige Els joins Gaia Fund Managers full time as a private equity investment specialist… Impact Fund Denmark is recruiting an investment director.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– Feb. 18, 2026
