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#Featured: Returns on Investment podcast
Impact investing gets a B+ on its annual report card. The topline number of $114 billion in impact assets under management got most of the headlines, including from ImpactAlpha, after the release last month of the seventh annual impact investor survey from the Global Impact Investing Network. In our latest Returns on Investment podcast, we go behind the headlines and pick apart the GIIN report. The conclusion of our roundtable trio: impact investing has to get both bigger and better, and fast. “There are people doing a lot of little deals. You don’t have that many significant transactions of size,” says Imogen Rose-Smith, senior writer with Institutional Investor magazine.
Listen to our latest podcast, “Impact investing’s annual report card.”
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See #Signals below for Part 3 of our “Fellow Travelers” series on reinventing impact investing in emerging markets:
We’re looking for leaders driving impact investing around the world. The Global Steering Group for Impact Investment will honor investors, managers, entrepreneurs and market-builders. Deadline: June 16. Submit an entry
#Dealflow: Follow the Money
National Geographic Society commits $50 million to impact investing. The science and research nonprofit is the latest to jump into mission-driven investing. “We recognized the opportunity to double down on our ability to make an impact,” says president Gary Knell. The commitment represents 5% of National Geographic’s $1.2 billion endowment, which got a boost in 2015 through a joint venture with 21st Century Fox. CA Capital Management will advise National Geographic in how to invest the $50 million. The organization is expected to focus on research, education and “exploration,” says Jean Case, chair of the National Geographic Society Board of Trustees and a champion of impact investing as CEO of the Case Foundation.
World Vision Australia introduces endowment impact fund. The Australian division of the Christian humanitarian aid organization is “soft-launching” its fund, while it explores investment options. It is targeting institutional investors and may eventually cater to retail investors as well. World Vision will roll out products later this year, and is exploring grants, loans, impact bonds, convertible notes and venture equity. “The shared value investment market is still very immature in Australia and in the last five years, there has been an appetite for it,” says World Vision’s Claire Rogers. “We’re on the cusp of commercialisation of this sector.” Some forecasts say impact inviesting in Australia and New Zealand could grow to A$32 billion ($24 billion) by 2022 with a push from government.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
Fellow Travelers, Part 3: Where impact investing in emerging markets goes from here. In the final part of ImpactAlpha’s “Fellow Travelers” series, Andrew Haimes and Steven Zausner suggest how to re-ignite impact investments in small and growing businesses in emerging markets. Problem: Many public-sector investment products are inappropriate, complex, and time consuming. Solution: Asking private and institutional investors what types of products, services, and partnerships they need from DFIs to facilitate investment in emerging-markets companies. Problem: Small investments are too small to justify transaction costs. Solution: By reducing transaction costs, many otherwise marginal or unattractive projects might produce the returns commercial investors require. Problem: Impact investors too often think like return-maximizing commercial investors. Solution: Commercial investors need to find investments where the return considerably outweighs the risk. Impact investors shouldn’t have to. Read Fellow Travelers, Part 3:
Ocean plastics go high-fashion with Stella McCartney. Ocean sustainability is the theme of the week, with the Ocean Conference at the U.N. in New York. Fashion designer Stella McCartney wants to help clear the tons of plastic dumped in the oceans each year. McCartney is partnering with Parley for the Oceans to use their “Ocean Fabric” — a yarn made of salvaged fishing nets and plastic bottles — in her clothing line. Parley pulls 80 to 120 tons of plastic per month out of the ocean through a partnership with the Maldives government. It is negotiating an expansion of its program to 38 other island nations. McCartney has been designing high-end vegan clothing and accessories since 2001. Her shoes and handbags can cost more than $1,000.
Building social ventures in South Korea: Q&A with Crevisse’s Wonyoung Kim. Wonyoung Kim doesn’t like the term incubation. He prefers “venture building” or “entrepreneurs for entrepreneurs.” Kim and his team founded Crevisse in 2006 to “co-build” companies that use technology to create positive benefits for society in South Korea. ImpactAlpha correspondent Michael Standaert caught up with Kim at the Asian Venture Philanthropy Network’s annual conference in Bangkok. Kim dished on South Korea’s budding impact investing scene, on what Crevisse looks for in the social ventures it partners with and how one of its investees is working with Seoul to lower the cost and time of city planning. Read the full Q&A with Crevisse’s Wonyoung Kim:
The future of farmed fish. Two of the top aquafarming countries are teaming up. Vietnam, one of the world’s top producers of prawns and pangasius, a type of freshwater “shark catfish” (that’s a real thing) more commonly known as basa, is looking to make improvements, technologically and sustainably, in its fast growing aquaculture sector. Vietnam’s exports are poised to grow in the next 10 to 15 years and the country could see $12 billion in income from the sector by 2020, and more than $30 billion by 2030.
Norway, a major producer of Atlantic salmon, wants to help as it confronts challenges in its own aquaculture industry. Norway has offered “Nordic Solutions to Global Challenges” (here and here), and is eager to share its aquaculture expertise as well. Norwegian aquaculture executives are working with Vietnam to support the country’s growth potential in farmed fish, molluscs, and seaweed.
Vietnam’s aquaculture market is restricted by out-of-date technologies and poor supply-chain linkages. These challenges have led to the industry’s unsustainable development, including poor quality products, high prevalence of disease, lack of environmental controls, and poor management practices, according to Nguyen Huu Dung of the Vietnam Sea Culture Association. Pangasius farming has a particularly poor track record, and has shown few signs of sustainability progress.
Norway has grappled with disease and product quality in its own farms. In 2009, Norway launched a national strategy for developing an environmentally sustainable aquaculture industry. It includes: increasing farm inspection and disease treatments; developing an environmental monitoring system for nutrient salts and waste discharges from farms; and developing guidelines for climate and eco-labeling to help consumers make informed decisions.
Onward! Please send any news and comments to TheBrief@impactalpha.com.