ImpactAlpha Open | December 19, 2023

ImpactAlpha Open: Scaling worker ownership + arbitrage opportunity in muni bonds

Dennis Price

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ImpactAlpha Editor

Dennis Price

Hi there, Agents of Impact! Two opportunities I wanted to especially flag:

⚡ Plugged In: Investing in inclusion-focused entrepreneurs. Earlier guests on Plugged In with ImpactAlpha contributing editor Sherrell Dorsey include VertueLab’s Aina Abiodun and Black Farmer Fund’s Olivia Watkins. Next up in the series featuring inclusive economy innovators is Lenore Champagne Beirne ofBright Ventures, which has backed a dozen diverse-led ventures in digital health, fintech and the future of work. Join us on LinkedIn Live, Thursday, Dec. 21, at 9am PT / 12pm ET / 5pm London. RSVP today.

🎉 Year-end sale starts now: Take 75% off. Find the alpha in impact in 2024. Subscribe to the news and intelligence platform impact investors trust – now $399 $99 for year one. Grab the deal.

In this week’s Open:

  • Scaling worker ownership
  • Impact investing without Jeffery Ubben
  • Arbitrage opportunity in muni bonds
  • Investing in maritime decarbonization

Ok, let’s jump in.  – Dennis Price

Must-reads on ImpactAlpha

  • Spotting high-impact muni bonds. Cities and other issuers that prioritize civic engagement and racial equity in the $4 trillion muni bond market see lower risks and improved outcomes. Investors are using social and environmental data and ratings to spot hidden opportunities. Go deeper.
  • Scaling worker ownership. Canada is enacting policies to encourage conversions to employee ownership trusts as a path to broader-based wealth, Roodgally Senatus reports. Take a peek.
  • Championing regenerative agriculture. Regenerative agriculture fosters community as well as food security, David Bank learned at a gathering in Hawaii (see also Jessica Pothering’s explication of the UN’s 10-point plan for transforming food systems). Dig in.
  • Impact investing without Jeffery Ubben. The shuttering of Ubben’s $2.6 billion Inclusive Capital Partners may be a function of too little, rather than too much, faith in the sustainable future, Imogen Rose-Smith suggests. (Get Imogen’s take)
  • Climate solutions in India. Shefali Anand reports that investors in India are centering climate concerns, even if the government doesn’t. Get smart quickly.
  • The Dubai Consensus. Renewables’ improved performance and falling costs will doom fossil fuels, even if COP28 didn’t, writes Amy Cortese. Check it out.

Agents of Impact

🏃🏾‍♀️ People on the move

  • Matthew Mendelsohn, who led the Canadian government’s impact and innovation unit, will become CEO of Social Capital Partners. Jon Shell chairs the board.
  • Forest Investment Associates appoints Mike Cerchiaro as president and CEO, replacing Mark Walley. FIA also promoted Andrew Boutwell to head of investment management, and MaryKate Bullen to head of business development and sustainability.
  • Erick Berkerts will step down as CEO of Evergreen Climate Innovations at the end of this year. Michelle Carr, ex- of The Nature Conservancy, will replace Berkerts as CEO.

The Week’s Call and Podcast

📞 On the Call

The arbitrage opportunity in high-impact municipal bonds (video). In the $4 trillion muni market, small movements in the pricing of bonds can mean millions of dollars to cities and other issuers. Rampant misperceptions and mispricing of demographic risks in the municipal bond markets mean investors can put capital into underinvested communities – and get paid for doing so.

“The impact and the alpha together is a place that we can step into with good hearts,” Homero Radway of Activest shared on ImpactAlpha’s “Muni Impact” call last week. HIP Investor’s Paul Herman, Kestrel’s Monica ReidMatt Posner of Court Street Group, and Lincoln Institute’s RJ McGrail highlighted data to guide muni investors to overlooked impact and hidden risks.

🎧 On the podcast

Host Brian Walsh shares highlights from Call No. 57, which featured investors, advisors and ratings organizations with tips for finding hidden impact and overlooked risks in municipal bonds. Plus the headlines. 

Short Signals: What We’re Reading

💲 Dry impact powder. Pitchbook data shows $741 billion in assets under management controlled by private market impact fund structures (the GIIN’s $1.2 trillion figure includes investment opportunities not found in private fund structures). Of that total, $200 billion is in dry powder waiting to be allocated. Debt and private equity impact funds were popular in 2023 following a banner 2022 for real assets fundraising. (Pitchbook)

🚢 Investing in maritime decarbonization. The Poseidon Principles, a banking coalition for shipping finance which represents $100 billion in loans, is targeting net-zero emissions by 2050, in line with the International Maritime Organization’s target. The strategy calls for a 5% uptake by 2030 of near-zero emissions tech, fuels and energy sources. (Environmental Defense Fund)

🌍 African climate tech. Catalyst Fund received more than 3,000 pitch decks from climate tech innovators in Africa last year. Among the 300 that exclusively focus on climate solutions in Africa, agriculture and energy startups make up the bulk of startup activity. To meet demand, climate financing for mitigation and adaptation needs to grow ten-fold, to $300 billion annually. (Catalyst Fund)

🗺️ Treasure map to progress. Too many startups are focused a few familiar industries. The VC firm 50 Years mapped massive markets with little startup investment. Based on an ‘opportunity ratio’ of U.S. market size to total invested in startups annually, the top industries to build in are paper, plastics and rubber, housing construction, chemical products and education. (50 Years)

🇺🇸 Uptick in American dynamism. A surge in pandemic-era startup activity boosted the economic dynamism (measured by startup rate, movement of workers, and pace of innovation) of the average US state to a 13-year high, reveals Economic Innovation Group’s Index of State Dynamism. Despite the uptick, American dynamism still lags the peak levels of the 1990s. (EIG)

🎓 Responsible investing 101. ‘ESG Explainer’ educates people about responsible investing, dispels myths about ESG and explores the political agendas around money and financial futures. (Americans for Financial Reform Education Fund and Take On Wall Street)

Get in the Game

💼 Step up

  • Oikocredit seeks an investment officer in Nigeria.
  • Opportunity International is looking for a Chicago-based capital solutions senior associate.
  • Supply Change Capital is on the hunt for a senior associate to lead deal sourcing and diligence in Chicago or Los Angeles.

NEW! Visit ImpactAlpha’s Career Hub for more impact investing jobs. Contact us for job postings.

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