Greetings, Agents of Impact!
Featured: Greening China
Asia Green Fund’s Bo Bai: Cleantech investing opens the door to impact investing in China. Chinese investors are moving capital into cleantech and low carbon funds. Driving the activity: President Xi Jinping’s pledge last year to peak China’s carbon emissions prior to 2030 and reach carbon neutrality by 2060 through energy reforms, renewables policies and a nationwide carbon emissions trading system. A secondary driver is a more socially-conscious younger generation, signaling opportunity for a broader set of impact investments. The trillions of dollars that are expected to flow to clean and green sectors has private equity and venture capital firms moving into the backyard of Asia Green Fund, one of China’s earliest private equity funds with a focus on accelerating China’s transition to a low-carbon economy. “We actually need more people,” Bo Bai, the fund’s chairman and founder, says in an interview with ImpactAlpha correspondent Michael Standaert in Shenzhen. “If we have more people working on [carbon neutrality], we have a bigger ecosystem.”
Bai and other Chinese investors are key to accelerating the low-carbon transition in the world’s largest emitter of greenhouse gases and, by extension, global progress on climate action in advance of the COP26 climate conference in Glasgow in November. Bai’s firm manages the half-billion-dollar U.S.-China Green Fund, which opens channels into Chinese markets for U.S. and European cleantech ventures (see, “U.S.-China Green Fund kicks off next stage of investments in China’s low-carbon transformation”). In March, Asia Green Fund launched the yuan-denominated Carbon Neutrality New Materials Fund with a target of more than $155 million. Bai is excited about the next generation of investors, whom he says are adopting even stronger impact-driven investment strategies. On Bai’s radar: Indonesia, Malaysia and the Philippines. Southeast Asian markets are driving demand for clean products and technology from the U.S., Europe and China – and the next wave of cleantech investment.
Keep reading, “Asia Green Fund’s Bo Bai: Cleantech investing opens the door to impact investing in China,” by Michael Standaert on ImpactAlpha.
Dealflow: Follow the Money
Apollo takes controlling stake of Italian eco-packaging producer Reno De Medici. The private equity giant last year brought on impact investing veteran Lisa Hall to drive impact investing deeper into the portfolio of the $461 billion asset manager (see, “Private equity giant Apollo Global invites agents of impact inside”). The two-thirds stake in RDM, which manufactures and distributes recycled cardboard, is the first investment from Apollo’s impact platform. The deal “reflects our strategy to find good businesses where we believe we can drive financial and impact performance to increase their beneficial effects on society and the planet,” said Apollo’s Marc Becker.
- Circular economy. RDM aims to reduce waste, emissions and water usage. Apollo is looking to help the Milan-based company scale its business and operations across Europe. Apollo acquired the stake from RDM’s principal owner, Cascades Inc., and Caisse de dépôt et placement du Québec, for €1.45 ($1.71) per share. Apollo intends to acquire the remaining shares and take the company private.
- Dive in.
Amid record heat, Equilibrium Capital raises $1 billion for second greenhouses fund. From their Portland offices, the team at Equilibrium Capital was closing a second greenhouse agriculture fund just as the temperature in the Oregon city hit a record-shattering 116°F. Controlled Environment Foods Fund II is itself a record-breaker as Equilibrium’s first billion-dollar fund. High-tech greenhouses use up to 90% less water and can be 30-times more productive per acre than outdoor fields. “Agriculture is ground-zero for climate,” Equilibrium’s Dave Chen told ImpactAlpha. “The No. 1 determinant of quality and quantity, the No. 1 disruptor, is the weather.”
- Institutional shift. Fundraising blew past the firm’s initial target of $500 million. The final close of $1.022 billion is triple the $336 million Equilibrium raised for its first controlled environment foods fund in 2019. That fund invested in greenhouse facilities as well as operators like AppHarvest, Revol Greens, Fresh Farms and Houweling Group. Investors in the new fund include pension funds like the San Francisco Employees Retirement System and AP4 in Sweden, as well as the Development Bank of Japan and others. Said Chen, “There is a palpable step-change in the amount of capital that wants to be deployed.”
- Keep reading.
Pomona Impact backs Mexican neobank Vexi. Mexico City-based Vexi aims to serve underbanked Mexicans with credit cards and a mobile app for managing transactions and budgeting. The $500,000 debt investment from Pomona comes as Vexi prepares to launch a new American Express card for “buy now, pay later” promotions, said Vexi’s Gustavo Blasquez.
- Flexible financing. Pomona invested via its second venture fund, which is looking to raise $30 million to invest in early-stage businesses in agriculture, renewable energy, financial services and other sectors. The vehicle is backed by Capria Ventures, IDB Lab, the Fund for the Promotion of Development, and others. Pomona launched its inaugural $20 million fund in 2017 (see, “Pomona Impact’s “big push” strategy for agriculture in Central America”).
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Dealflow overflow. Other investment news crossing our desks:
- BlackRock will launch a $500 million green infrastructure fund for Asia, Latin America and Africa.
- Vancouver-based Active Impact Investments closes its $54 million climate tech fund.
- The International Finance Corp. is allocating $40 million to Sagicor Bank to help Jamaica’s small businesses rebound from the pandemic.
- Woodforest National Bank and American Express National Bank commit $8.8 million to community development financial institutions via Opportunity Finance Network’s CDFI Community Investment Fund.
- Green Gold Farms secures $1.6 million to help Ghana’s agri-sector boost local organic food production.
- Credit Suisse and JPMorgan Chase are partnering on a public-equities ESG fund focused on health and nutrition.
Agents of Impact: Follow the Talent
Journalists Nikole Hannah-Jones and Ta-Nehisi Coates join Howard University. Hannah-Jones will lead a new Center for Journalism and Democracy, supported by $20 million from the MacArthur, Knight and Ford foundations and an anonymous donor… Lisa Fedorenko, ex- of Marshall Investments and Reinventure, and Glenn Bartlett, ex- of Amber Electric, will run Alberts Impact Capital, launched by the Australian family behind AC/DC and other music bands… The Urban Land Institute appoints Peter Ballon of CPP Investments as global chair… Erika Danina Williams, ex- of Oceanside Museum of Art, is named vice president of client development at RSF Social Finance… Cathay Dinas, ex- of Uptima Entrepreneur Cooperative, joins Backstage Capital as director of operations.
Gigi Kamali, ex- of Biome, is named director of development at Notley… The Asian Venture Philanthropy Network and the African Venture Philanthropy Alliance are accepting applications for their inaugural impact investing fellowship… Amundi, Franklin Templeton, HSBC Asset Management, the International Business of Federated Hermes and Vista Equity Partners are among the 41 new signatories to the Net Zero Asset Managers initiative… Imperative 21 is hiring a lead of narrative and strategic communications in New York… The Common Fund for Commodities is recruiting a junior project manager in Amsterdam… The Carrot Project is recruiting an executive director in Boston… Nuveen is looking for a senior associate of impact investing in New York.
Tideline seeks a short-term impact investing consultant to work remotely… BlackRock has openings for an impact-focused director in its Alternative Solutions Group and an alternatives-focused vice president for its Impact Opportunities Fund in New York… Twilio is recruiting a senior director of strategic initiatives for social impact… M&G is hiring an impact director in London… The Common Fund is looking for a junior project manager… Shaper Impact Capital seeks a volunteer thought leadership/social media influencer… The Milken Institute is hosting, “Investing with Impact through Public Securities Markets to Finance the SDGs,” tomorrow, July 8.
Thank you for your impact.
– July 7, 2021