Greetings, Agents of Impact! A reminder of these ImpactAlpha partner events this week:
- U.S. Impact Investing Alliance and the Federal Reserve Bank of New York host “Capital Quest: Connecting capital to communities,” Thursday, June 3.
- Transform Finance kicks off a series on grassroots community-engaged investment, Thursday, June 3.
Featured: Call No. 28 Recap
For these wealthy families, deploying catalytic capital for impact is a privilege and responsibility. The very rich are different, as F. Scott Fitzgerald once observed. One difference is the prerogative to put impact first in the allocation of at least some of their family’s wealth. That makes family offices an undertapped source of “catalytic capital” for investments in racial justice, loans in low-income communities, financing for smallholder farmers, and other economic opportunities for marginalized communities. Unlike pension funds and asset managers, which may be constrained by legacy notions of fiduciary duty in managing other people’s money, wealthy families have the discretion to take higher risks, lower returns or a longer time-horizon in order to drive impact on social and environmental issues they care about. “We have no constraints – we’re rich,” Diane Isenberg, the principal of $400 million family office Ceniarth, said on last week’s subscriber-only Agents of Impact call. “We’re delighted that we are able to have the flexibility to maximize impact to a sector or geography or community where there’s a dearth of it.”
Hundreds of Agents of Impact explored the range of strategies for moving family capital toward impact with Isenberg, including Sobrato Philanthropies’ Sheri Sobrato Brisson and Regan Pritzker of the Libra and Kataly foundations. Other impact-first family offices include the Berwind family’s Spring Point Partners in Philadelphia, Chris Larsen’s and Doug Galen’s Rippleworks in Redwood City, Calif., and the Kaplan family’s A to Z Impact in Wilmington, Del. Globally, about 7,300 family offices controlled nearly $6 trillion in assets as of 2019. “As we slowly transition towards utopia, there’s a lot of shit to be dealt with, excuse my language,” Isenberg said. She said Ceniarth is seeking to mobilize more catalytic capital by rallying like-minded families to share strategies, due diligence and dealflow. “If you have capacity and you have the freedom to actually do more impact-first, get in touch.”
Keep reading, “For these wealthy families, deploying catalytic capital for impact is a privilege and responsibility,” by David Bank on ImpactAlpha.
Dealflow: Smallholder Agriculture
IDH Farmfit Fund acquires stake in LendXS to expand lending to smallholder farmers. Approximately 270 million smallholder farmers worldwide live in poverty; few banks are willing to extend them credit due to the high costs and percieved risks. LendXS, with operations in Kenya, Ghana, Uganda and Cote d’Ivoire, provides rural lenders and other financial institutions with low-cost digital tools for data collection, loan monitoring and credit scoring to help speed loans to small-scale farmers.
- Lending costs. Utrecht, Netherlands-based IDH Farmfit Fund acquired a 21% stake in the agri-fintech. The partnership will create “a synergy that is expected to unlock access to credit for many farmers,” said Roel Messie of Farmfit Fund, the smallholder farmer finance arm of IDH’s Sustainable Trade Initiative.
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ADAP Capital backs FarmMoja to train Kenyan farmers. Kericho-based FarmMoja operates in Kenya’s tea region, offering hundreds of smallholder farmers access to farming inputs and technical training, particularly around crop diversification. FarmMoja is among a dozen investments from early-stage impact investor ADAP Capital’s second fund.
- A different approach to poverty. ADAP this year has cut checks to Nairobi-based The Pathology Network – Africa, which is expanding access to specialized diagnostics like cancer screenings, and Addis Ababa-based Zafree Papers, which makes paper our of recycled agricultural waste. ADAP expects to make another five to 10 investments of less than $100,000 from its second fund.
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China’s Carbonstop raises $7.7 million to help Chinese companies lower their carbon footprints. The company’s carbon accounting and management software is used by companies including Alibaba, Baidu and Microsoft, as well as government and nonprofit groups. Hillhouse Capital and Matrix Partners China led the Series A round.
Signals: Rebuilding Black
One hundred years later, investing in the reconstruction of Black Wall Street. U.S. President Joe Biden became the first president to commemorate the 1921 Tulsa Race Massacre that destroyed the thriving Black community of Greenwood, Okla. (listen to The Reconstruction podcast, “How the legacy of Black Wall Street and the Tulsa Race Massacre is shaping a more just future”). “We do ourselves no favors by pretending none of this ever happened or doesn’t impact us today, because it does still impact us today,” Biden said. “The only way to build a common ground is to truly repair and to rebuild.” The Biden administration announced policies aimed at closing racial wealth gaps with investments in homeownership and small business ownership in communities of color. Biden’s American Jobs Plan includes a $100 billion boost over five years in federal procurement from minority-owned businesses and a $31 billion commitment to small business programs in underserved communities.
- Black-owned business. Uncle Nearest Premium Whiskey launched a $50 million venture fund to “recreate a Black Wall Street of sorts within the spirits industry.” The fund has backed London-based Equiano, an Afro-Caribbean rum company, and Black-owned distillery Jack From Brooklyn. “As an African American, learning about that history broke my heart because we, as a people, were really onto something in Tulsa, Oklahoma,” said Uncle Nearest founder Fawn Weaver. Less than 1% of spirit brands are owned by people of color.
- Paying homage. Entrepreneur Kathryn Finney’s great grandparents lost their home and a thriving restaurant business in the 1921 race massacre. Finney launched Genius Guild to address “the ways in which capitalism and capitalist markets have been manipulated to limit, exclude and defraud Black communities — to defraud people like my great grandparents” (see, “Agent of Impact: Kathryn Finney”). Other ventures inspired by Tulsa’s history include Greenwood, a neobank founded by former Atlanta mayor Andrew Young, rapper Michael “Killer Mike” Render, and Bounce TV’s Ryan Glover to serve Black and Latinx customers.
- Onward.
Agents of Impact: Follow the Talent
HCAP Partners’ Hope Tarirai Mago will chair Impact Capital Managers’ board of directors… SJF Ventures promotes Jacqueline Bennett to principal… Rockefeller Capital Management seeks an ESG integration lead in New York… Global X ETFs is looking for a director of sustainable investing in New York… BlackRock Alternative Investors is hiring a head of sustainable investing in London… The U.S. International Development Finance Corp. is looking for a managing director of impact management and monitoring.
Habitat for Humanity International seeks an associate director of impact investments in Washington, D.C… Also in D.C., Accion Venture Lab is recruiting a senior director of investments… Lolita Nunn of Fair Food Network, Jeff Batton of Homestake Venture Partners, David Lynn of Mission Driven Finance, Janice St. Onge of Flexible Capital Fund and Blake Jones of Kachuwa Impact Fund discuss creative financing strategies, today at 11am PT / 2pm ET.
Thank you for your impact.
June 2, 2021
