The Brief | May 13, 2019

Prudential’s 80/20 rule for institutional investors, tech’ing up India shops, Virginia’s creative economy, career moves and openings

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Greetings, Agents of Impact!

The Call No. 9: Beyond Trade-offs. Be intentional about where you play. Tune in to ImpactAlpha’s Agents of Impact Call No. 9 to continue the conversation with guests in our special-edition podcast series produced in collaboration with Omidyar Network. Prudential Financial’s Ommeed Sathe (see below), Elevar Equity’s Sandeep Farias, Blue Haven Initiative’s Liesel Pritzker Simmons and Omidyar Network’s Robynn Steffen join ImpactAlpha’s David Bank, Thursday, May 30th, at 10:00 am PT / 1:00 pm ET / 6:00 pm London. RSVP today.

Podcast Series: Beyond Tradeoffs

Prudential Financial: An 80/20 rule helps an institutional investor manage its risks, returns and impact. Per the Pareto Principle, 20% of the inputs often cause 80% of the outputs. In its $860 million impact investment portfolio, Prudential Financial has carved out 20% for investments with the potential to have outsized impact. The Newark-based insurance giant, one of the world’s largest institutional investors with nearly $1.4 trillion in assets, is demonstrating impact strategies that fit within the norms and constraints faced by institutional investors. Prudential’s impact portfolio is invested to show measurable benefits in financial inclusion, affordable housing preservation, educational excellence, workforce development and sustainable agriculture and other areas. Prudential’s 80/20 rule is a real-world implementation of a Beyond Trade-offs truism (introduced in Episode One): See the full continuum of capital and be intentional about where you play.

The bulk of the impact portfolio, part of Prudential’s broader corporate balance sheet, is expected to generate the same kind of risk-adjusted market-rates of returns as the rest of Prudential’s huge portfolio. But Ommeed Sathe, head of impact and responsible investments at Prudential, has carved out 20% of the impact portfolio for investments that wouldn’t pass typical tests. Because the “catalytic portfolio” is kept outside the assets matched to Prudential’s insurance liabilities, Sathe is able to take on a bit more risk. “More creative, more thoughtful capital can be really crucial in unlocking solutions at scale,” Sathe says in Episode Three of ImpactAlpha’s “Beyond Tradeoffs” podcast series, produced in collaboration with Omidyar Network. “Having this resource that we can do things that are catalytic, that can change the shape of an industry or change entrenched patterns, is really, really important.”

Read on, and listen in, to “An 80/20 rule helps an institutional investor manage its risks, returns and impact,” by Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

Peel-Works raises $5 million to give India shops a tech upgrade. E-commerce is booming in India and on-demand food delivery is increasingly popular. Mumbai-based Peel-Works is trying to help India’s millions of small corner shop owners “stay relevant for the new-age retail consumer.” Peel-Works makes software that helps small corner shops manage inventory, analyze purchasing data, and order popular products through its delivery service. The company connects shop owners to potential lenders. Peel-Works is similar to Frogtek, which provides analytics software for mom and pop shops in Latin America. Peel-Works’ system, called Taikee, is being used by about 20,000 shop owners in 16 cities, Inc42 reports. The company’s Series B round was backed by Equanimity Investments, HDFC Bank, Unilever Ventures, Chiratae Ventures and Inventus Capital India. Here’s more.

Virginia Community Capital backs Richmond arts and skills center. The East End of Richmond contains 60% of the city’s public housing. The area is gentrifying in a city that already has high rates of displacement of existing, primarily Black residents. Virginia Community Capital invested $340,000 to help a community arts center acquire and renovate an abandoned church at the edge of East End. Oakwood Arts was founded by Virginia Commonwealth University adjunct professor Shannon Castleman to foster creative skills and host events. “I saw how quickly the neighborhood was changing and thought about creating an inclusive and safe place for old and new neighbors to interact and address changes through art,” Castleman said. Read on.

Agents of Impact: Follow the Talent

Aleem Remtula, Bogdan Tatarchevskiy, Courtland Walker and Odette Tolliver become partners at Developing World Markets. Edward Marshall is the investment firm’s new managing partner… The Sustainability Accounting Standards Board’s Jean Rogers joins Terra Alpha Investments’ advisory board… A team from University of Vermont’s Grossman School of Business wins the Total Impact Portfolio Challenge… Opportunity Finance Network seeks a vice president of programs in Washington DC… World Benchmarking Alliance is hiring a research analyst… Spero Ventures is looking for a venture capital associate in Redwood City… New Island Capital Management is recruiting a real assets/real estate associate in San Francisco… Carbon Brief is offering a two-week summer journalism internship in London.

May 13, 2019.