Investing in opportunity zones, water investments, Agents of Impact, dealflow



Greetings, ImpactAlpha readers!

Featured: Impact Voices

Rip Rapson, Kresge Foundation president: How to make Opportunity Zones work. As Washington welcomed the overhaul of the tax system earlier this winter, many community-minded investors and champions of more inclusive economies feared that essential tools to support and improve low-income communities would be gutted. “Thankfully, they weren’t,” writes Rip Rapson, president of the Kresge Foundation, in a guest post on ImpactAlpha.

  • Opportunity Zones… The new Investing for Opportunities Act, among the many provisions of the tax bill, sets up ‘opportunity zones’ which let investors temporarily defer taxes by investing their capital gains in distressed areas.
  • First principles… Rapson proposes “first principles” of investing in low-income communities to guide implementation of Opportunity Zones investments. All entities investing in these communities, says Rapson, should meet community needs, be transparent and accountable to residents, plug into long-term plans and channel capital to where it’s most needed.

Says Rapson, “We must continue to highlight to state and federal leaders the importance of the community development system to our cities and advocate for program implementation that lifts community voices and focuses on outcomes.”

Read, “Opportunity Zones need responsive, transparent and long-term investments,” by Rip Rapson, on ImpactAlpha.

  • WATCH: Transform Finance’s Andrea Armeni spoke to Fran Seegull and John Cochrane of the US Impact Investing Alliance and Rachel Reilly Carroll of Enterprise Community Partners about the Opportunity Zones’ potential for transformation.
  • SEE: The first round of Opportunity Zones designations for 18 states.

    Signals: Ahead of the Curve

    The expanding universe of public-equity water investments. Growing demand, tightening supply. That’s the water investment opportunity in a nutshell. By 2030, demand could exceed supply by 40%, according to the IFC. With that opportunity has come a growth in solutions. “The number of companies in the water value chain has grown significantly,” says Hubert Aarts, manager of the The Pax Global Environmental Markets Fund, which has been investing in water since 2002.

    • Broad universe… The universe for public equity water investments is broad, more than 250 companies with a combined market cap of around $1 trillion, according to PAX.
    • Cyclical… The universe includes cyclical plays such as water infrastructure of pipes, pumps, and meters that see increased demand with infrastructure spending commitments or new environmental regulations.
    • Defensive… Companies that supply chemicals and products for water treatment with repeat purchase models have more steady and predictable earnings.
    • The cities… investing in water infrastructure.
    • More ImpactAlpha…  water coverage.

    Agents of Impact: Follow the Talent

    The Case Foundation’s Impact Investing Network Map, built with data from ImpactAlpha’s ImpactSpace, has been selected as a visualization finalist for Fast Company’s World Changing Ideas Awards… Secha Capital in Johannesburg (whose consumer goods deal we covered here) is hiring a Head of SynergiesMercy Corps is looking for a principal for its Social Venture Fund in Kampala, Uganda.

    Dealflow: Follow the Money

    A recap of this morning’s deals…

    Green bank for southern Africa will blend public and private finance. The Climate Finance Facility will focus on non-industrial off-grid electricity and water projects in regions of South and southern Africa that lack access to basic services. Read more.

    Tienda Pago raises $7.5 million for super-short small business loans. The Peruvian startup provides one-week lines of credit via mobile phone to small retailers in Peru and Mexico. Follow the story.

    Grameen Crédit Agricole Foundation lends $2 mln for microfinance in Jordan. The foundation made the three-year loan to FINCA Jordan, one of the 20 microfinance institutions in the FINCA Impact Finance network. Read on.

    Alt-credit scoring marketplace Namaste Credit raises $3.8 million.  Delhi-based Namaste Credit assesses India’s small businesses and matches them with one or more institutional lenders on their 30-strong lender marketplace. Find out more.

    Click here for more ImpactAlpha dealflow. Send deal tips and news to thebrief@impactalpha.com.

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