Beats | May 17, 2017

Private equity looks to SDGs, Emerson Collective backs Neighborly, A16z backs OpenInvest, sleeping…

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#Featured: ImpactAlpha Original

Growth-market private equity investors seek direction from the 2030 global goals. Amid volatile currencies and political uncertainty, the Sustainable Development Goals are providing direction for private-equity investors in growing global markets. The 17 goals were touted as a menu of investment opportunities today at the International Finance Corp.’s Global Private Equity Conference in Washington, D.C.

Vivina Berla, co-managing partner at Sarona Asset Management, told ImpactAlpha, “We founded Sarona to provide smart capital to build better businesses across frontier and emerging markets. It is exciting to see the SDGs provide a framework that the whole world can sign up to.”

Keep reading “Growth-market private equity and the SDGs” from Jérôme Tagger:

Growth-market private equity investors look to 2030 global goals for direction

#Dealflow: Follow the Money

Neighborly attracts $25 million to bring public finance online. Laurene Powell Jobs’ Emerson Collective and Palantir co-founder Joe Lonsdale’s 8VC co-led the investment in the two-year-old digital marketplace, reports Fortune. Neighborly connects cities to investors to finance bridges, fire departments and schools. Traditionally, municipal bonds have been sold to institutional investors through brokers and underwriters. Neighborly opens up the $3.8 trillion municipal bond market to people living in the places looking for funds, “returning the opportunity of bonds back to the people that stand to gain from them the most,” said actor Ashton Kutcher. Kutcher’s Sound Ventures re-upped its investment in the firm. Neighborly’s commission of one percent are about half the fees of other public-finance firms. Early investors Maven Ventures, Bee Partners, and Stanford University also participated in the funding round.

Andreessen Horowitz backs impact investing robo-advisor OpenInvest. The socially-responsible online-investment platform for retail investors raised $3.25 million in seed financing. One of Sand Hill Road’s best known venture capitalists led the round. Unlike many online passive investment options, OpenInvest allows users to manage their portfolio around themes such as climate change, fossil fuels, gender and LGBT equality, or political affiliation, and collectively invest and divest with other investors. Social impact plays a role in 93 percent of millennials’ investment decisions, the company says. “We wanted to show that the public isn’t a sideshow [in impact investing] — that it can be the mainstage,” CEO Conor Murray told ImpactAlpha. Other social- and impact-focused robo-advisors also are reaching out to retail investors.

Finnfund finances Agflow Poultry to boost livelihoods of Ethiopian farmers. The Finnish development finance agency made a $10 million loan to Agflow Poultry to expand its EthioChicken farm network. EthioChicken launched in 2010 to hatch and sell chicks to rural Ethiopians to boost food and income security. The company sells non-native breeds, which it maintains thrive better than Ethiopian chickens. EthioChicken has sold 13 million chicks in the country through 1,800 rural agents and 700 employees, 40 percent of them women. Ethiopia is afflicted by drought, a surging population and political instability, which make it vulnerable to food crises. Outside of Ethiopia, chicken ownership and farming has won support from prominent funders, like Bill Gates, who has been outspoken about the potential of small-scale poultry farms to aid poor women. His foundation recently gave $21.4 million to the World Poultry Association.

New Hampshire-backed fund raises commercial capital to support local startups. New Hampshire’s Business Finance Authority launched a $1.8 million fund to cultivate the state’s startup community. More than 40 private investors committed capital to Millworks Fund Series II. The authority agreed to match private dollars two-to-one for the next three years. Startups will be eligible for a $300,000-per-year competition for tech startups and a $300,000-per-year accelerator program. Millworks II follows Millworks I, launched in 2010. Three-quarters of the organizations backed by Millworks I have shown financial growth and follow-on investment. Similar funds and startup growth initiatives have launched in other states recently, including Texas and Vermont.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

Corporate pension plans are a “sleeping giant” for sustainable finance. “We need to activate the multi-trillion dollar corporate pension industry” to direct capital towards sustainable investments, tweeted Lise Kingo, CEO of the UN Global Compact from the Global Private Equity Conference in D.C. “A true sleeping giant,” she added in parenthesis. A new report from UNPRI and the UN Global Compact says half of the world’s largest corporations have signed the Global Compact, a corporate pledge towards sustainability. But only 10 percent of their pension plans have signed the Principles for Responsible Investment to put responsible investment principles into action. Univest, the in-house asset manager of Unilever’s $26.6 billion pension schemes, signed on to the PRI in 2013. The alignment of Unilever, a corporate leader in sustainability, and the company’s pension plan manager, is all too rare. Why should corporate pension align with their sponsors? To improve performance, manage risk, align with external managers and boost their sponsors’ credibility and employee retention, according to the report.

#2030: Long-Termism

How corporate pioneers are turning SDG talk into action. Heard enough talk about the Sustainable Development Goals? The Global Opportunity Explorer features 300 products and services that are turning talk into action. Danone’s vitamin-enhanced yogurt, Shokti, for example, has generated more than $1 million in revenue in Bangladesh while advancing goal №2 (zero hunger) and №8 (decent work and economic growth). The milk is collected from 475 small herders within 50 miles of the factory. The affordable and fortified yogurt is distributed door-to-door by 250 female micro-entrepreneurs.

The site was launched in New Delhi at the recent “Making Global Goals Local Business” event. “More than 50 percent of the progress towards the global goals will come from India,” said UN Global Compact’s Lise Kingo (again!). “There are $1 trillion worth of market opportunities for companies working in the sustainable area in India,” she says, and 72 million potential jobs by 2030.

The projects in the Explorer are categorized not only by the goals they address, but by business sectors like energy, transportation, or healthcare, and markets such as “smart cities,” “smart water,” and “cyber security” (see: “Corporations play catch-up on Sustainable Development Goals”). The compendium is the result of a survey of 18,000 business leaders over five years, led by Sustainia, the Global Compact and DNV GL, an advisory and assessment firm, and makes the case the global goals open opportunities outside companies’ traditional lines of business. The development of smart agricultural tools is a $5.9 billion market.

Onward! Please send any news and comments to [email protected].