The Brief | October 1, 2018

Opportunity zone signals, Alpbach fundamentals, $1bn for better batteries, Leapfrog Investments’ healthcare portfolio

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Greetings, ImpactAlpha readers!

Double Feature: Impact Voices

What applications from 141 fund managers show about emerging Opportunity Zones activity. “Letters of inquiry came from large corporate banks and managers in small, rural communities, and everything in-between,” writes Rip Rapson, president of the Kresge Foundation. Kresge, with the Rockefeller Foundation, this summer issued a call for fund managers considering opportunity funds with inclusive investment theses. The overwhelming response was a signal that “fund managers across the country are engaged and moving quickly to raise capital to invest in opportunity zones,” Rapson writes on ImpactAlpha. he says.

Still, uncertainty reigns. “Few managers were able to paint a clear picture of exactly who the actual investors will be,” writes Rapson. Few managers provided theories about exits. “And when we say few, we mean . . . none.” Most of the proposals targeted real estate. “This was not the fundamental intent of the legislation, which placed high emphasis on financing for operating businesses, venture, and private equity.”

Read, “What applications from 141 fund managers show about emerging Opportunity Zones activity,” by Kresge president Rip Rapson.

Alpbach Fundamentals: Ten principles to help bring clarity to impact investing. For a decade, pioneer specialist investors led the way in impact investing. Now, an increasing number of impact funds are being created by mainstream asset managers. With the growth has come growing concerns about “impact-washing.” That, in turn, has stirred a boomlet in impact investing “principles,” including from the International Finance Corp., the Global Impact Investing Network and, last week, the United Nations Development Programme. In August, 10 “fundamentals” emerged from a gathering of 42 impact investment leaders at the Alpbach Forum in Austria.

“Not all impact is equal,” writes Big Society Capital’s Cliff Prior, who helped convene the meeting, in a guest post on ImpactAlpha. “A commercial fund seeking scale and full risk-adjusted market returns is not the same as a specialist impact investor dedicated long-term to resolving complex, tough social issues. Both are valuable, each is different.” Among the Alpbach fundamentals: Make explicit where you act in the impact investment field. Engage with end-users in the impact investment process. Ensure that your investments add more value to end-users than they extract. Report publicly and transparently against common impact standards.

Read, “Alpbach Fundamentals: Ten principles to help bring clarity to impact investing,” by Big Society Capital’s Cliff Prior on ImpactAlpha.

Dealflow: Follow the Money

World Bank earmarks $1 billion for better batteries. The bank’s “Accelerating Battery Storage for Development” program aims to triple installed battery capacity in developing countries by 2025 by catalyzing an additional $4 billion in public and private investments. The program will fund and de-risk investments in utility-scale solar-plus-storage projects, mini-grids and other off-grid systems, as well as stand-alone batteries. The pledge was among a number of climate commitments made in New York at the One Planet Summit, hosted by former New York Mayor Michael Bloomberg and Bloomberg Philanthropies. Here’s more.

Leapfrog Investments backs east African medical distributor Pyramid Group. Leapfrog estimates that Africa’s market opportunity for medical devices and pharmaceuticals will be $58 billion by 2022, with the rise of lifestyle diseases that require more specialized care and intervention. Tanzania-based Pyramid Group is the region’s biggest distributor of some types of specialty equipment, like cardiac and orthopaedic equipment. Pyramid Group’s products currently reach about four million people, half of whom are part of the continent’s emerging consumer class. Leapfrog didn’t disclose the size of its stake. Read on.

Agents of Impact: Follow the Talent

Bangladesh, New Zealand, and South Africa launched national advisory boards to promote impact investing, joining 18 other country members of the Global Steering Group for Impact Investing… Pro Mujer is hiring a director of global health for Latin America in Mexico City, Lima or within the U.S.

October 1, 2018.