The Brief

The Brief: Assembling a playbook for prosperity for all

ImpactAlpha · March 24, 2025

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Greetings Agents of Impact!

📞 The Call: Sharing the wealth through employee ownership. It’s not only workers who get a boost from owning a stake of the companies they work for. Investors can find impact alpha as well, from improved retention and productivity, tax breaks, and other business advantages. Apis & Heritage’s Todd Leverette, Essential Owners Fund’s Malini Ramanarayanan Moraghan, Social Capital Partners’ Jon Shell, Ownership Capital Lab’s Alison Lingane, Lafayette Square Institute’s Jack Moriarty, and other Agents of Impact will share emerging strategies for financing employee-led buyouts, Wednesday March 26 at 10am PT / 1pm ET / 5pm London. RSVP now.

In today’s Brief:

  • What and who is working for shared prosperity
  • Microfinance exit in Nigeria
  • Rural lending in the Philippines
  • Shareholder resolutions face higher hurdles

A playbook of what and who is working to build prosperity for all. It’s a small win, but the apparent survival of a US Treasury Department fund that was subject to a Trump administration termination order offers a welcome respite and a marker for the possible path forward. The CDFI Fund provides capital to community development financial institutions to finance small businesses and farmers, real estate developers and first-time homebuyers, and supermarkets, health clinics and community centers. The elements of its survival strategy: bipartisan support and a demonstrable record of success by community lenders in delivering economic opportunity and equitable access in rural and urban areas, in red states and blue, to Black, white and any other borrowers. Such common sense and common purpose makes community lenders like CDFIs a linchpin of the agenda of economic opportunity, vibrant communities, and shared prosperity that we’re calling Re:Construction. The series of events, posts and other activities both leans into today’s efforts to build strong impact investment ecosystems and ties back to the historical Reconstruction era that followed the Civil War. “Today, we face similarly troubling divisions,” says GOOD TRBL’s Napoleon Wallace. “To overcome them, we will need a new kind of Reconstruction, one that invests deeply in our communities and institutions to build a more united, healthy and prosperous future.”

  • What’s working. Entrepreneurial ecosystems. Access to capital. Small business support. Manufacturing investments. Workforce training. The menu of successful solutions is not that different for “blue” urban areas and “red” rural regions. “You put on a blindfold and have folks tell you their challenges, it sounds a hell of a lot the same,” Harold Pettigrew, head of Opportunity Finance Network, an association of CDFIs, tells ImpactAlpha. New small business starts, after a decades-long slump, have been on a tear since 2021, with more than more than five million new businesses starting each year. After decades of expansion, wealth inequality has ever so slightly decreased in recent years. “Ownership of assets is very unique. It’s something that can pass from one generation to the next,” says Self-Help’s Martin Eakes, who will join Agents of Impact at Re:Construction North Carolina on Friday, April 4 (RSVP). Over the next several months, ImpactAlpha’s Re:Construction project will collect examples of successful multi-racial wealth-building initiatives. That may seem out of sync in a period of backlash and reaction. That’s exactly the point. By highlighting what’s working, we hope to draw out unlikely allies and assemble a playbook for shared prosperity.
  • Dodging a bullet. Community lenders and their allies rallied to defend the CDFI Fund after Trump’s executive order targeted it for elimination, along with a handful of other agencies (for background, see “Threat to CDFI Fund gives community lenders a chance to flex bipartisan support”). The Native CDFI Network said the Treasury Department had reaffirmed its support for the fund, and determined that CDFI Fund activities are mandated by statute, saying, “The CDFI Fund is operating as normal and does not anticipate any disruptions to the programs.” Republican-led congressional districts, including in Mississippi and Louisiana, make up eight of the 10 districts receiving the most CDFI investment over the past decade, according to an analysis by the Urban Institute.
  • Green bank fight. CDFIs have also been under attack for their role in deploying the Biden-era $27 billion Greenhouse Gas Reduction Fund. Climate United, the Coalition for Green Capital and Power Forward Communities filed for a preliminary injunction over the weekend to prevent the Environmental Protection Agency from terminating GGRF grants, and to unfreeze funds held at Citibank (for background, see “Climate United carries legal banner in battle for the green bank”). Beth Bafford of Climate United stated that, without relief, the group will have to wind down operations and lay off its 37 staffers. A hearing is set for April 2; a decision on the preliminary injunction is expected by April 4.
  • Keep reading, “A playbook of what and who is working to build prosperity for all,” by David Bank on Impact Alpha.
  • Spring tour. Join ImpactAlpha’s in-person Re:Construction gatherings at the Ackerman Center for Excellence in Sustainability at UNC Chapel Hill, Friday, April 4 (RSVP); the Aspen Institute in Washington DC, Tuesday, April 8 (reserve your spot); and the Boston International Film Festival, Saturday, April 12 (buy tickets). 

Dealflow: Impact Exits

Alithea and Goodwell sell stake in Baobab Nigeria. Nigerian impact investor  Alitheia Capital and Goodwell Investments have exited Baobab Nigeria, selling their stake to its Paris-based microfinance parent company, Baobab Group. Baobab offers microloans, digital payments and pay-as-you-go solar services in seven African countries, including the Democratic Republic of Congo, Senegal, CĂ´te d’Ivoire, and Madagascar. Its loans to micro, small and medium-sized businesses range from one million to 150 million Naira ($650 to $100,000). The partners say they achieved a 3x return on their investment with this exit. Last month, UK private equity firm Apis Partners sold its stake in Baobab Group to Cairo-based Beltone Capital.

  • Early investors. Alitheia and Goodwell were among the first local backers of Baobab, which had no Nigerian investors on their board at the time. The impact investors first backed Baobab in 2012 via a fund for West African microfinance investments. The partners reupped their investment in 2015 via their jointly managed uMunthu fund. The partners’ hands-on assistance and strategic support helped Baobab expand to 38 branches across 16 states in Nigeria, reaching nearly 230,000 customers – 48% of whom are women – and dramatically increase the size of its loan book. 
  • Underserved businesses. The two firms are fundraising for their second uMunthu fund, which is backed by family offices, private and institutional investors. The fund aims to raise €150 million to invest in affordable housing, healthcare, food, transportation and consumer goods and services for underserved communities. Its portfolio includes Zambian agritech Good Nature Agro, Mozambique’s aquaculture company Chicoa Fish Farm and South African online upskilling platform for teachers, Instill Education. 

Higala raises seed funding to reduce the cost of rural lending in the Philippines. The cost of payments, lending and money transfers remains exceedingly high in many rural parts of the world. Manila-based Higala makes back-end software that helps banks in the Philippines lower the cost of processing payments and other financial transactions. Its customers include Rizal Microbank, a savings bank based in coastal Davao City that caters to underbanked individuals, Guagua Rural Bank and Rural Bank of Cadiz. It’s also partnering with the Rizal Commercial Banking Corp. to extend access to its digital payments software to small financial institutions. The year-old company’s $2.8 million seed round was backed by Talino Venture Studios, an inclusive fintech-focused VC based in Los Angeles, and Singapore’s 1982 Ventures.

  • Inclusive fintech. Separately, in India, financial infrastructure firm Navadhan raised 1.1 billion rupees ($12.9 million) in Series A financing to increase access to credit in rural communities. The company makes software for mainstream banks and other financial institutions to provide working capital loans to rural micro and small businesses. The round was led by NabVentures, the venture capital arm of India’s National Bank for Agriculture and Rural Development. Singapore-based fintech venture Funding Societies, meanwhile, closed a new round of funding from venture capital firm Gobi Ventures to expand access to credit to small businesses in Singapore, Indonesia, Thailand, Malaysia and Vietnam.
  • Check it out. 

Dealflow overflow. Investment news crossing our desks:

  • Unilever is selling The Vegetarian Butcher, a 15 year-old plant-based meat company from The Hague, to Dutch alt-protein company Vivera. (Reuters)
  • WaterEquity is out with the Everspring Fund, an evergreen investment fund for water and sanitation projects and companies in emerging markets. (WaterEquity)
  • The UK’s Thena Capital, a women-led fund that invests in early stage medical tech companies, reached a ÂŁ50 million ($65 million) first close for its first fund. (Thena Capital)
  • Chicago-based VestedWorld secured $20 million toward a $35 million goal for its Rising Star fund for early stage African tech companies. (Innovation Village)
  • European deep tech VC firm 360 Capital led a €5 million ($5.4 million) funding round for Resilco, an Italian company recycling industrial waste into new industrial materials. (Silicon Canals)

Signals: Shareholder Power

Proxy season gets underway amid a changed landscape for shareholders. Fewer shareholder proposals are expected to come to a vote this year after the Trump administration made it easier for corporations to exclude proposals they deem to be “micromanaging.” Last month’s new guidance, part of a broader dismantling of regulatory guardrails, upended proposals long in the works. For example, companies have challenged 42% of proposals filed by members of the Interfaith Center on Corporate Responsibility, compared to 12% this time last year. Two dozen proposals have been successfully rebuffed, compared to two at this point last year. The political attacks have caused big asset managers and proxy advisors to retreat, and emboldened right wing critics of DEI and other social and environmental issues. “No matter the political pressure on the tools of our trade, we must continue to be at the table with companies in this fraught era,” ICCR’s Josh Zinner said last week during a preview of this season’s annual general meetings. “Dialogue with companies will be more critical than ever.” 

  • Voting power. Institutional Shareholder Services, one of the biggest proxy-voting advisory services, recently announced that it will no longer consider a board’s gender, racial or ethnic diversity when making director election recommendations. That has some investors rushing to an upstart rival (for background see, “ISS bows to political pressure, abandons portfolio optimization for clients“). Alex Thaler of Iconik said that with big asset managers and proxy advisors in retreat, individual investors are looking to customize their proxy voting profiles in line with their values. He said the tougher environment for shareholder resolutions is pushing more of the action to director elections, which conversely have gotten less expensive.
  • Systems stewardship. In a deregulatory world, investors have an increased responsibility to engage in “system stewardship” and oppose company practices that cause portfolio-wide damage and threaten overall investment returns, writes The Shareholder Commons’ Frederick Alexander in a guest post on ImpactAlpha. About 40 proxy initiatives target the portfolio-wide effects of individual company choices, as detailed in TSC’s newly released “Portfolios on the ballot“. The Northwest Coalition for Responsible Investment is asking UnitedHealth Group to report on the impact and macroeconomic risks of its practice of delaying and denying medical treatment. Proposals at General Motors and Tesla challenge deep-sea mining practices, which can reduce the ocean’s ability to absorb carbon dioxide and result in environmental impacts that affect diversified shareholders. Yum! Brands and McDonald’s face challenges to the overuse of antimicrobials in their supply chains. “Silence is not an option,” says Alexander.
  • Keep reading, “Shareholders can fight back with system stewardship,” by The Shareholder Commons’ Frederick Alexander on ImpactAlpha. 

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

Ford Foundation’s Roy Swan was one of 14 board members ousted at Fannie Mae and Freddie Mac last week by US Federal Housing Finance Agency director Bill Pulte. “Freddie Mac bridges the gap between privileged and underserved communities,” Swan shared on LinkedIn. “I witnessed firsthand how the organization provides financial stability to families and supports community banks by providing liquidity, making vital contributions to our nation’s wellbeing.” Pulte has appointed himself chairman of the two entities, disregarding a statute barring the FHFA director from holding a position in such regulated entities (disclosure: Ford Foundation is an investor in ImpactAlpha).  

Rewrite Capital Advisors seeks a senior analyst for employee ownership M&A in Vancouver… The Joseph Rowntree Foundation is hiring an investment associate director in London… Green Climate Fund is recruiting a Latin America and Caribbean-focused project officer… The US Green Building Council is on the hunt for a sustainable finance principal… Ownership Works seeks a marketing and communications director in New York… Potencia Ventures is hiring an impact investment analyst in Colombia or Mexico. 

Aniket Shah, Jefferies’ global head of sustainability and transition strategy, will join Beyond Bretton Woods’ Frank Van Gansbeke for a virtual conversation on reforming the global financial system, Friday, March 28.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– March 24, 2025