ImpactAlpha Open | November 1, 2022

ImpactAlpha Open: The original impact investment + The Liist

Dennis Price

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ImpactAlpha Editor

Dennis Price

Hi there, Agents of Impact! Welcome to this week’s ImpactAlpha Open

Funding for water, housing, schools. The municipal bond market has been called the original impact investment asset class. But laced with historical biases, the U.S. municipal bond market has often been a source of racial harm as well. 

ImpactAlpha kicked off its ‘Muni Impact’ project this week with a podcast conversation with Kimberlee Cornett and Zoila Jennings of the Robert Wood Johnson Foundation, which has embarked on a broad effort to reshape the nearly $4 trillion muni market around health equity and racial justice. 

  • Listen to Cornett and Jennings on an Agents of Impact podcast with ImpactAlpha’s David Bank
  • Read the podcast recap.
  • Join the next Agents of Impact Call, “Optimizing muni bonds for racial equity,” with Public Finance Initiative’s Lourdes Germán, RWJF’s Cornett and other special guests, Wednesday, Nov. 16. RSVP today (open to all).

In this week’s newsletter:

  • November’s ‘Liist’ of open impact funds;
  • Nuclear energy as a sustainable investment;
  • Making co-ops work for investors; and
  • Decarbonizing chemicals.

Ok, let’s get to it. – Dennis Price

Must-reads on ImpactAlpha

  • Opportunity costs. The ability to manage tradeoffs between risk, return and impact is one of impact investing’s biggest contributions. “Accept that tradeoffs exist,” in ESG and impact investing, University of Oxford’s Bob Eccles advises in a post on ImpactAlpha. And “address these tradeoffs in a rational and constructive way.” (Open)

    • To drive economic development through small businesses in emerging markets, investors need to take on greater risk and invest in local, and often new, fund managers, reports ImpactAlpha’s Jessica Pothering.
    • Sourcing food locally may be more climate-friendly, writes ReFED’s Alejandro Enamorado, but when local isn’t feasible, “companies like Misfits Market might just be the imperfect solution” to address the challenge of surplus food. (Open)
  • Creative climate capital. Climate action is facing mighty headwinds ahead of the COP27 global climate summit in Sharm El Sheikh, Egypt, reports ImpactAlpha’s Amy Cortese. Blended-finance deals for climate mitigation have been falling in recent years – in part because more climate solutions have become “just plain old investable,” Convergence’s Joan Larrea told ImpactAlpha’s Dan Keeler.
  • Private market impact. Private equity can bring oversight to smaller enterprises and unlock impact alpha with ESG data from portfolio companies, writes Dynamo Software’s Danielle Pepin in a guest post (open). Private equity investors with mostly white, male investment teams are making their own kind of tradeoff, suggests David Reuter of LLR Partners, who cites evidence of stronger performance from diverse teams and companies (open).
  • Market watch. The loss of reproductive rights in the U.S. represents a political risk, Preventable Surprises’ Jerome Tagger and Christina Zausner of Reproductive Rights 360 write in a guest post. (Open)

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Agents of Impact

🤝 Blake Jones, Kachuwa Impact Fund: Making co-ops work for investors, too

Blake Jones is “a cooperative geek.” After co-founding four co-op enterprises, including Namaste Solar and Clean Energy Credit Union, he has brought the principles of cooperative ownership to impact investing. Boulder, Colo.-based Kachuwa has grown to more than 200 members and more than $30 million in assets.

The evergreen fund has stakes in many enterprises familiar to ImpactAlpha readers, including Uncommon Cacao, Meow Wolf, and Organically Grown Company; funds like Apis & Heritage and Harlem Capital; and financial institutions like Walden Mutual Bank and Climate First Bank – “things that have higher impact than what you can find on Wall Street,” Jones says.

🏃🏿‍♀️ On the move

  • Elizabeth Seeger, former managing director of sustainable investing at KKR, joins the International Sustainability Standards Board. 
  • Sonal Shah, the Obama White House aide who founded Georgetown’s Beeck Center for Social Impact and Innovation and the Asian American Foundation, is the new CEO of The Texas Tribune.
  • Rohan Ganesh, ex- of Google spinout Verily Life Sciences, joins Obvious Ventures as partner.

Impact Briefing (podcast)

🎧 On this week’s podcast

Host Brian Walsh has the headlines and Amy Cortese chats with Oxford’s Bob Eccles about why distinguishing between ESG and impact investing matters more than ever.

The Liist: November

💸 Seven impact funds that are raising capital now (November edition)

Climate action may be facing headwinds ahead of the COP27 but a dedicated cohort of private climate investors is marching forward to build and scale the pipeline of climate technologies and resilience-focused companies. This month’s Liist, in partnership with Realize Impact, features a range of climate-focused investment funds in the market. 

Included on The Liist:

  • Propeller Ventures;
  • Wangara Green Ventures;
  • BlackTech Capital;
  • Beyond Capital Ventures;
  • Boston Impact Initiative;
  • Systemiq fund II; and
  • Omnivore fund III.

Go deeper (Open).

Deal Spotlight

🧪 Solugen rakes in $200 million to expand zero-carbon chemical production

Houston-based Solugen, a zero-carbon chemicals producer, has raised over $200 million to fund a new “bioforge” production plant in Minnesota. Returning investor Lowercarbon Capital led the new investment round, which pushed Solugen’s valuation above $2 billion. Participating investors include Fifty Years VC, Temasek Holdings, climate VC firm Refactor, and global asset manager Baillie Gifford. Swedish investor Kinnevik contributed $50 million to the round to help Solugen break into the European market.

  • Profit potential. Solugen says it is on pace to make more than $100 million in revenue this year. The company is not yet profitable, but Fifty Years’ Seth Bannon, who sits on Solugen’s board of directors, told ImpactAlpha, “Companies like Solugen are utilizing advances in synthetic biology to achieve software-like margins making and selling carbon-negative chemicals.”
  • Check it out.

Six Signals

🌐 Global median class. Global economic growth over the last 30 years has been strongly pro-poor. (Max Roser / Our World in Data)

🏠 Eviction prevention. No-interest micro loans: Philanthropist’s new tool in preventing homelessness. (Los Angeles Times)

🏦 Bankable U.S. households. More Black and Hispanic American added bank accounts during the pandemic. (Bloomberg)

👽 Space’s economic impact. Electric rockets. Climate research. Mars exploration. NASA’s economic benefit reaches all 50 states. (NASA)

🗞️ Inclusive climate journalism. Scan the The Global South Climate Database of scientists and experts in the fields of climate science, climate policy and energy. (Reuters Institute)

☢️ Solving the energy trilemma. Affordability, sustainability, and reliability. The case for nuclear energy as a sustainable investment. (The Center for ESG and Sustainability)

Get in the Game 

💼 Step up

  • UBS is recruiting a program director for social finance in London.
  • AquaSpark seeks a head of portfolio for investments in Utrecht.
  • BFA Global’s Catalyst Fund is looking for an investment principal in Africa, preferably in Nairobi and Lagos.

🤝 Meet up

  • The Taskforce on Inequality-related Financial Disclosures will meet virtually for its global meeting on Thursday, Nov. 3.
  • Tideline presents “Truth in climate impact: management and labeling best practices,” with Brookfield’s Kelly Goddard, British International Investment’s Nicola Mustetea, and Prime Coalitions’ Keri Browder, moderated by Tideline’s Jane Bieneman and Claudia Leon, Thursday, Nov. 3.
  • Mission Investors Exchange national conference convenes in person Dec. 5-7 in Baltimore featuring BlocPower’s Donnel Baird, 1863 Ventures’ Melissa BradleyLaura Callanan of Upstart Co-Lab, and others. MIE members can register here

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