The Brief | April 2, 2024

The Brief: Community investing on the Liist of impact funds

ImpactAlpha
The team at

ImpactAlpha

Greetings Agents of Impact!

In today’s Brief:

  • Community investing on the Liist of funds actively raising capital
  • Known Holdings’ new investment bank 
  • Open call for the ownership economy

Featured: The Liist

Fund managers deepen and broaden impact strategies for underserved communities (The Liist, April 2024). Overhauling systems designed for exclusion starts a few dollars at a time. On this month’s Liist of actively raising impact funds, fund managers are building on proven strategies that undercut systemic racism and inequality, expose mispriced risk, and redirect capital to human and environmental resources that deliver value. Two funds that started in local communities in the US Northeast are now expanding to the rest of New England. Flexible Capital Fund got started in rural Vermont, channeling revenue-based financing and other flexible investments to sustainable local businesses. The community development financial institution is in the market with a $30 million regional fund. Boston Impact Initiative launched in 2013 to address the city’s racial wealth gap through local business lending. Its $20 million second fund is delivering concessional debt and equity to diverse-led businesses across New England.

  • Muni impact. Clarion Call Capital is looking to deepen the municipal impact bond strategy that founder Eric Glass developed for $725 billion asset manager AllianceBernstein (see, “‘You can’t do impact on a passive basis’”). Part of Clarion’s strategy is to offer debt directly to public projects in health, education and infrastructure to help underserved municipalities and other public entities work around mispriced risk.
  • Uplifting the workforce. New fund manager Torana Group is out with a private equity fund that transfers a portion of company ownership to businesses’ frontline workers. Winnipeg Ventures is teaming up with Seedstars on an edtech venture fund focused on education access and skills training for Latin American and US-based Latino students and workers.
  • Keep reading, “Fund managers deepen and broaden impact strategies for underserved communities (The Liist, April 2024),” by Jessica Pothering on ImpactAlpha.
  • Scan more than 100 impact funds that have been raising capital in the past year on The Liist, ImpactAlpha’s searchable database. Know an impact fund manager currently raising capital? Complete this short form.

Dealflow: Inclusive Economy

Known launches ‘founder-centric’ investment bank for mid-sized companies. Known Holdings, a Black, Indigenous, Latina and Asian American-owned asset management firm, has launched Known Growth, an investment bank that will invest in and scale middle-market businesses led by underrepresented founders. Known Growth will focus on helping founders scale while retaining ownership and control. The investment bank, based in New York, will “increase access to all forms of relevant capital, with an eye test for the best terms at the lowest cost,” said Known’s Nathalie Molina Niño. That includes critical growth capital such as “private equity, private debt and low-cost loans for scaling businesses on a trajectory for serious scale,” she told ImpactAlpha. 

  • Returns on inclusion. Known’s Valerie Red-Horse Mohl will lead the investment bank (listen to her on the podcast, “Moving capital at scale to elevate communities of color”). The bank will invest in “traditionally under-capitalized founders, and underutilized sectors that are ripe for investment and growth,” said Red-Horse Mohl. The firm last year acquired Black women-led Blk Grvty, which is raising a $25 million fund to provide low-cost working capital loans and grants to diverse fund managers.
  • Share.

IRA-backed program commits $4 billion in tax credits for 100 green projects. The tax credits for more than 100 projects in 35 states are backed by the Qualifying Advanced Energy Project Credit (48C) program, which was expanded under the Inflation Reduction Act. More than half of the $4 billion in credits will go to clean energy, manufacturing and recycling projects, including electric vehicles, nuclear, solar and wind energy, and energy storage. The rest will go to critical materials recycling and industrial decarbonization projects. The program provides an investment tax credit of up to 30% of qualified investments for certified projects. The Department of Energy, which made the awards, did not name the recipients.

  • Coal country. Around $1.5 billion in tax credits will go to projects in former coal communities that are transitioning to renewable energy. The Biden administration’s agenda “places direct emphasis on communities that have traditionally powered our nation for generations, helping ensure those communities reap the economic benefits of the clean energy transition,” said US Energy Secretary Jennifer Granholm.
  • Funding frenzy. The pace of IRA funding is picking up as the Biden administration races to deploy the funds ahead of the upcoming presidential election. Last month, the DOE announced $6 billion in matching grants for 33 industrial decarbonization demonstration projects spanning steel, aluminum and cement manufacturing and food, paper and pulp production. The agency’s Loan Programs Office last week approved a $1.5 billion conditional loan guarantee to Holtec International to restart a nuclear power plant in Michigan, and $500 million for a low-carbon aluminum smelter being built by Century Aluminum.
  • Check it out.

Dealflow overflow. Investment news crossing our desks:

  • SDS Capital’s National New Markets Fund made a $17.5 million investment in Rich Products, a food company headquartered in New York, to create full-time manufacturing jobs for minority workers in Texas. (SDS Capital)
  • BioConsortia, a California-based company developing bacteria-based agricultural products to increase crop yields and improve sustainability, raised $15 million in a round led by Otter Capital. (BioConsortia)
  • German sustainable packaging venture Watttron secured €12 million ($13 million) in Series B funding from Circular Innovation Fund, the European Circular Bioeconomy Fund and other backers. (EU-Startups)
  • Terragia Biofuel snagged $6 million to produce low-carbon ethanol and other biofuels from biomass, such as wood, rice and wheat straw, and corn stover. (Terragia Biofuel)

Signals: Ownership Economy

Putting ownership and wealth-building strategies on center stage. “We are on the cusp of catalyzing an ownership movement,” WES’s Smitha Das and Gary Community Ventures’ Santhosh Ramdoss wrote on ImpactAlpha last year. This year, that movement is showing up at the Neighborhood Economics conference, next week’s Employee Ownership Ideas Forum at the Aspen Institute, and next month’s Employee Ownership Equity Summit, hosted by Project Equity. In October, ownership-economy practitioners will gather at SOCAP in San Francisco to share strategies, many of them previewed in ImpactAlpha (and in our database of more than three-dozen ownership economy funds). Ownership themes run through the more than 400 sessions proposed through SOCAP Open (voting is open through Sunday, April 14). Among the submissions: 

Agents of Impact: Follow the Talent

Johan Rockström of the Potsdam Institute for Climate Impact Research wins the Tyler Prize for identifying the boundaries of Earth’s life-support… Richard Williams is promoted to lead portfolio manager of Boston Trust Walden’s small- and SMID-cap equity strategies… Mercy Corps Ventures seeks an venture investment associate in Mexico City. 

Stanford Accelerator for Learning is looking for a manager for its AI Learning Studio… ABN AMRO is hiring an investment manager for a sustainable impact fund… Access to Nutrition Initiative has an opening for an impact investment manager… Global Nomadic is looking for a renewable energy projects supervisor based in Peru.

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

Thank you for your impact!

– April 2, 2024