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The Brief: 10x’ing systemic investing, election impact (audio), impact agtech, corporate green bonds, communal ride-hailing, immigrant bonds, inclusive NMTCs



Greetings, Agents of Impact! 

The Call: 10x’ing systemic impact investing (subscriber-only). Overcoming systemic racism. Mitigating systemic risk. Everybody is talking about systemic investing. Living Cities’ Demetric Duckett, Cambridge Associates’ Sarah Hoyt, Sinclair Capital’s Jon Lukomnik and The Investment Integration Project’s Bill Burckart will join David Bank and Monique Aiken to take systemic impact from talk to action. Don’t miss Agents of Impact Call No. 22, this Thursday, August 13, at 10am PT / 1pm ET / 6pm London. RSVP today.

Featured: Agents of Impact Call

The Call No. 21: Impact investors confront the impact of the November election (audio). It’s long past time to get political. Impact investing, with appeal on both the left and the right, has generally steered clear of partisanship and elections. But the impact of the approaching U.S. election arguably dwarfs the impact of all impact investments. The consensus on ImpactAlpha’s most recent Agents of Impact Call: Political disengagement is a luxury impact investors can no longer afford. Political disengagement “is an absolute symptom of comfort and privilege and it’s unacceptable because, at the end of the day, people are dying because of the policies that are put in place,” said the Nonprofit Finance Fund’s Antony Bugg-Levine. The Call was a too-rare discussion in a field that sometimes pretends market-based solutions can be divorced from government policy, and policy from politics. At stake in the election is the enabling environment for effectively all of the investments impact investors are making, ImpactAlpha’s David Bank argued in a recent column, calling on impact investors “to step up to ensure the decisive defeat of Donald Trump.”

Private investors have fewer barriers to political participation than nonprofit organizations and philanthropic foundations. “We’ve really tried to lean in electorally because as an asset allocator, as a family office, we can,” said Blue Haven Initiative’s Liesel Pritzker Simmons. Last year, Pritzker Simmons and her husband, Ian Simmons, organized a letter from nearly two-dozen wealthy individuals asking presidential candidates to raise taxes on the richest of the rich. “We see our civic engagement and our political work as being fundamental to how we engage as investors,” she said. “Because we want fair rules. We want communities to benefit. We want a tax system that works better for everyone.” Trevor Neilson, founder of i(x) investments, made a full-throated call for impact investors to get off the sidelines. “Everything is at stake,” he said. “There is no hope on climate if Donald Trump is reelected.” Disdain for the incumbent was less of a surprise than the depth of The Call’s critique of impact investing itself. “We’ve been talking about impact investing for the last God knows how many years, and we’re like ‘We’re gonna do good by people,’” said the Beeck Center’s Sonal Shah. “And you know what people are resoundingly saying? ‘You’re not doing good. You’re not helping us.’” Impact investing has become “plutocratic and technocratic,” with investors making decisions without the lived experience of needing government services, added Bugg-Levine. “And people are pissed off and sick of it.”

Keep reading, “The Call No. 21: Impact investors confront the impact of the November election,” and listen to the full audio replay on ImpactAlpha.

Dealflow: Follow the Money

AgFunder launches impact fund for agrifood tech startups. The San Francisco-based venture capital firm launched its GROW accelerator in Singapore last year to support Asia’s agrifood tech ecosystem. It’s now adding an impact fund to support seed and Series A-stage ventures, including companies from GROW’s first cohort. The fund is targeting $20 to $30 million to make investments of $100,000 to $400,000 in companies digitizing agriculture and addressing food waste, greenhouse gas emissions, soil health and food insecurity. The fund is mapping its impact to the Sustainable Development Goals. 

  • Impact agenda. The COVID crisis has made food security a top priority, particularly in Singapore, where food supplies from Malaysia were threatened by border closures.“Food security is a big issue, but no one was paying attention because they were all getting food on their tables,” AgFunder’s Michael Dean told ImpactAlpha. “COVID pushed it to the forefront.” 
  • SDG targets. GROW’s portfolio includes India-based ViridisRS, which uses aerial surveillance and sensors to help smallholder farmers map their plots and gain access to finance and insurance (SDG No. 1: no proverty, 2: zero hunger, 8: decent work and economic growth). Future Fields is cultivating cells as a medium for lab-grown meat production (SDG No. 3: health and well-being, 12: responsible consumption 15: life on land). “We are working through it,” Dean said of the SDG and impact mapping. “And if we are bullshitting, people will find that out quickly.” 
  • Check it out

Visa and Alphabet issue more than $6 billion in green bonds. The proceeds from Visa’s $500 million green bond issuance are slated for investments in green buildings, renewable energy, water and wastewater management and sustainable living initiatives. Google parent Alphabet claims its $5.8 billion sustainability bond is the largest-ever issuance by a company. Sustainable bonds “are an emerging asset class,” said Google CFO Ruth Porat. “We hope this transaction will help develop this new market.”

  • Muni green bonds. Franklin Templeton last week debuted a Municipal Green Bond Fund to invest in green bonds from cities, states and water, sewer and transportation agencies, as well as universities and hospitals.
  • Share this post.

Communal ride-hailing startup Plentywaka closes pre-seed round. The Lagos-based company operates an app-based mini-bus service for commuters. It raised $300,000 to expand to Abuja. Niche Capital, Microtraction and EMFATO Holdings backed the startup. Plentywaka, less than a year old, launched coronavirus safety measures and a delivery service. 

Freedom for Immigrants and Mission Driven Finance launch bond fund for detained immigrants. The Freedom100 Fund is targeting a $2.5 million raise to post bond for immigrants and asylum seekers in detention centers and to support their legal cases. The risk is absorbed by donors and investors who get repaid by the Department of Homeland Security if an individual’s case is successful. Immigrants and their families bear no repayment responsibility. 

Impact Voices: Pass the Mic

Dismantling structural racism in community development finance. Since its creation nearly two decades ago, New Markets Tax Credits have generated more than $52.5 billion in economic development investments in low-income communities. The program awards tax incentives that community development intermediaries can pass on to investors. Every $1 of public investment leverages $8 of private-sector investment. Last month, the Treasury Department’s CDFI Fund awarded $3.5 billion in credits to 76 institutions. Despite its success, the program underperforms in allocating credits to community development entities owned or led by Black, Native, and other people of color. “This is structural racism at play, and we must work to dismantle it,” writes Annie Donovan of Local Initiatives Support Corp., or LISC, in a guest post on ImpactAlpha. These firms lose out more often than their non-minority peers, and have received smaller awards when they do win allocations, in part due to their smaller size and slimmer track records. 

The Moving Forward Act passed by the U.S. House of Representatives would make New Markets Tax Credits permanent at $5 billion per year. Even a bigger pot of credits is not enough to even the playing field, says Donovan, a former director of the CDFI Fund, arguing Congress should give minority-owned organizations a better shot with tax credit set-asides. “Self-interest is not our motivation,” says Donovan; LISC, which is Black-led, has won some of the largest allocations over the life of the program and received $50 million in credits in the latest round. “By making the NMTC program more inclusive and equitable, Congress will build the resilience of our nation’s community investment infrastructure, support a more productive national economy and, most importantly, build assets for Black, Indigenous and people of color investors as well as minority communities.” 

Keep reading, “Dismantling structural racism in community development finance,” by Annie Donovan on ImpactAlpha.

Agents of Impact: Follow the Talent

Sophia Mendelsohn, ex- of JetBlue Airlines, joins Cognizant as chief sustainability officer and global head of ESG… Law firm Winston & Strawn launches an ESG advisory team… Digitalundivided is hiring a program manager and program associate in Newark… Ethic is looking for a relationship management associate in New York… Vista Equity Partners is recruiting an ESG project manager in San Francisco… NorthStar Asset Management is hiring an investment analyst in Boston.

ImpactAlpha’s Zuleyma Bebell is moderating DEC Project’s “Future Changemakers: Leading Through Uncertainty,” with DEC’s Daniel Dart, African Development Bank’s Nana-Spio-Garbrah and Gaza Sky Geeks’ Anam Raheem, Wednesday, Aug. 12… Also on Aug. 12, American Sustainable Business Council is hosting a briefing featuring Tom Steyer on U.S. presidential candidate Joe Biden’s climate plan.

Thank you for reading.

–August 11, 2020

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