ImpactAlpha Open | October 22, 2024

ImpactAlpha Open: Data to debunk emerging market risk + ownership lens for affordable housing

Dennis Price
ImpactAlpha Editor

Dennis Price

Hi there, Agent of Impact! ImpactAlpha’s David Bank and Jessica Pothering are in Amsterdam this week at the GIIN Impact Forum. Roodgally Senatus is in Los Angeles for the annual conference of Opportunity Finance Network. Say hi!

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In this week’s Open:

  • The Call: Ownership lens for affordable housing
  • Data to debunk emerging market risk
  • When impact gets complicated
  • Shawn Lesser’s new path for men’s mental health

Let’s jump in. – Dennis Price


Must-reads on ImpactAlpha

  • The Call: Putting an ownership lens on the preservation of affordable housing (video). The gap in affordable housing is wide and getting wider. Rent restrictions on some 200,000 units of affordable housing are set to expire next year alone, growing to one million units annually by 2032. Much of the public discussion around addressing that gap is focused on the creation of new affordable housing, which is important. The theme of last week’s Agents of Impact Call was preservation of affordable housing, both rental and owner-occupied, which is existential. A whole set of solutions and financing mechanisms has emerged to try to mitigate the risk of losing stock, including transferring ownership to tenants themselves. Michael Lohmeier of Impact Community Capital, Ruth Gao of Robert Wood Johnson Foundation, Paul Bradley of Roc USA, Jazmin Segura of Common Counsel Foundation and Devin Culbertson of Grounded Solutions Network joined the call to unpack those solutions.
    • Ownership lens. To take on commercial investors and developers, emerging strategies are pooling capital, bulk purchasing and going local to compete on timing and speed. In the face of private-equity consolidation and raising wealth gaps, “We’ve got to step up and deconsolidate and remove these properties from the speculative real estate market, and get them in the hands of the local community,” said Bradley of Roc USA, which helps mobile home owners form cooperatives to buy the land beneath their homes. Read the recap and watch the replay.
    • The investment case for affordable housing. Affordable housing has been seen by many investors as riskier than luxury projects. The opposite is true: affordable multi-family projects have higher occupancy rates, lower vacancy-related costs, and lower costs of capital, Multifamily Impact Council’s Bob Simpson explains in a guest post. Hear him out.
  • GEMs loan data debunks misperceptions of emerging-market risk. Despite years of calls for market transparency, the full data set of loans known as Global Emerging Markets, or GEMs, has never been made public. That made GEMs’ release of aggregated, anonymous crosstabs a revelation, if not a surprise, reports Jessica Pothering. Of more than 15,000 emerging market credit transactions over 40 years of lending, the average default rate for non-investment grade borrowers in emerging markets was just 3.6% – roughly equal to companies given a B rating by S&P or Moody’s. Read more.
  • Stuck in the mud: When impact gets complicated. You might wonder why it took so long, but impact investing has its own title in the “Little Book of…” series by trade publisher Wiley. Impact Engine’s Priya Parrish’s The Little Book of Impact Investing joins finance primers by experts such as Vanguard founder John Bogle and hedge fund manager Joel Greenblatt. In an exclusive excerpt from her new book, Impact Engine’s Priya Parrish explores what happens when impact investments flop – when “no matter how good the team or innovative the idea, the project just isn’t a success.” Check out the examples.
  • How and why to restore trust in voluntary carbon markets. The risk that credits in the voluntary carbon markets may not perfectly account for greenhouse gas effects pales in comparison to the risk of abandoning that market, which has become a vital funding source for clean cookstoves, solar lanterns, irrigation and other high-impact and low-carbon products, argued Acumen’s Amrita Bhandari and Carbon Solutions Group’s Daniel SadikSee why.
  • Big Tech goes all-in on nuclear power. Amazon has inked new agreements to build small-scale modular reactors, known as SMRs, to power the data centers used to support AI programs for its Amazon Web Services division, reports Lynnley Browning. Separately, Google says it will buy energy from SMRs with 500 megawatts of new capacity that startup Kairos Power plans to bring online in the US by 2030. Google called the deal the “first corporate agreement” to buy nuclear energy from multiple SMRs. Read more.

Agents of Impact

Shawn Lesser

💚 Shawn Lesser, The REAL: A new path for men’s mental health 

Shawn Lesser was always a familiar sight in baseball caps branded “Big Path Capital,” the impact investment banking and advisory firm he founded with Michael Whelchel in 2007. These days, he sports caps emblazoned with “The REAL,” short for The REAL Mental Health Foundation, an Atlanta-based nonprofit he launched last year to use conversation and community to improve the mental health of men and their families. Returning to his impact investing roots, he’s rolling out a fund of funds he hopes can attract $200 million for emerging mental health funds and companies. “We are building the mental health ecosystem by applying the same approach that succeeded in impact investing,” Lesser said last week at The REAL Summit, which convened several hundred financial executives at Deutsche Bank’s headquarters in New York. 

🏃 On the move

  • Dara Parker, previously with the Vancouver Foundation, replaced Adam Bendell as CEO of Toniic. Bendell will assume the role of president.
  • Impact Finance Belgium tapped Pierre Harkay, formerly with the Belgian Investment Company for Developing Countries, as CEO.
  • Blythe Burkhart, previously with Goldman Sachs, joined Blue Earth Capital as a growth equity analyst.

The Week’s Podcast

🎧 This Week in Impact: Ownership lens on housing

Host Brian Walsh takes up ImpactAlpha’s top stories with editor David BankUp this week: Highlights from this week’s Agents of Impact Call on putting an ownership lens on housing affordability; how and why to restore trust in voluntary carbon markets; and Amazon and Google opt for the nuclear option in their drive to supply their power-hungry data centers with carbon-free energy.


Get in the Game

💼 Step up

  • REDF (Roberts Enterprise Development Fund) is seeking a loan portfolio manager in San Francisco.
  • Sorenson Impact Advisory is looking for an investment associate in Salt Lake City.
  • Latimpacto is hiring a global markets and partnerships director in Bogotá.

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