The Brief | December 10, 2020

The Brief: Creative portfolios, digitizing doctors, women’s livelihoods, immigrant founders, plastic waste, moves from Bridgewater, BlackRock and New York Common

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Greetings, Agents of Impact! 

Featured: ImpactAlpha Original

Building a personal portfolio of impact investments in the creative economy. Artist housing in Michigan and Memphis. Immersive art experiences in New Mexico. A film studio in upstate New York that promises to put local talent to work. In five years, Lorrie Meyercord, an artist and acupuncturist turned impact investor, has deployed about $4 million of her personal wealth into arts and culture businesses. “You’re not just investing your dollars, you’re investing your life-force energy,” Meyercord told ImpactAlpha. Meyercord’s latest investment is in Upriver Studios, a for-profit film studio in the Hudson Valley, 90 minutes from Manhattan. The studio, the brainchild of actress Mary Stuart Masterson and filmmaker Beth Davenport, attracts film projects to the region and works with diverse local residents trained through the studio’s nonprofit workforce development partner, Stockade Works.

Creative investors are finding opportunities in the creative economy. Theatre, art and music, along with food, fashion, media and other creative sectors generate about $800 billion per year in economic activity and account for about 10 million jobs in the U.S. Meyercord’s journey is profiled in “Creative Impact: Impact Investing” from Upstart Co-Lab, a nonprofit connecting investors with creative economy deals. Meyercord’s first creative deal was in artist housing in Michigan and Memphis through Artspace, a nonprofit that builds and connects spaces with artists. She backed Meow Wolf, the Santa Fe-based B-corporation that creates immersive art experiences, as well as the Off-Broadway La MaMa Experimental Theatre Club in New York’s East Village. About Upriver, Meyercord says, “I liked supporting a women-led project, where women are looking around and saying, ‘How can I invest in my local community in a meaningful, impactful way?’” she explained. “That becomes a story that ripples out to other people to ask that same question of themselves, and to act on that.”

Keep reading, “Building a personal portfolio of impact investments in the creative economy,” by Meg Massey on ImpactAlpha.

Dealflow: Follow the Money

Elation Health raises $40 million to digitize independent primary care providers. On the surface, San Francisco-based Elation Health’s software helps independent doctor’s offices digitize paper-based patient records. The bigger vision: shifting the U.S. healthcare system from transactional, fee-for-service to patient-centered, value-based care. Elation serves 14,000 clinicians caring for seven million Americans. Its Series C investment round was led by Al Gore’s Generation Investment Management, with backing from existing investors Threshold Ventures and Kapor Capital (see, “Generation Investment Management: COVID-19 creates a generational opportunity for sustainability”).

  • Fit for use. Elation was launched in 2010 by brother-sister team Kyna and Conan Fong, who had watched their father’s private practice struggle to digitize its patient records. Most records management software is designed around billing, not patient care. “If you build fee-for-service software, you get fee-for-service workflows,” Generation’s Anthony Woolf told ImpactAlpha. Elation’s software, he says, “transitions physicians towards taking care of people over the long-term.”
  • Keep reading

IIX raises $27.7 million for third Women’s Livelihood Bond. If “three’s a trend,” publicly traded bonds to support women’s livelihoods are a signal to the $106 trillion global bond market. The third bond in the Women’s Livelihood Bond Series from Singapore-based Impact Investment Exchange, or IIX, raised $27.7 million from Nuveen, BlueOrchard, Pathfinder NZ, Hong Kong-based family office Grace Harmony and others. Proceeds will be invested in enterprises across South and Southeast Asia, helping 180,000 women rebound from COVID’s economic impacts. 

  • Building momentum. It took three years to raise $8 million for the first publicly traded Women’s Livelihood Bond, as skeptical investors sought additional risk reduction. The second bond ($12 million), and now the third, closed in quick succession. IIX’s Durreen Shahnaz said the firm’s persistence has “taught the world’s leading institutions how to create a new financial product that works for the 99%.” IIX aims to raise $150 million and benefit three million women.
  • De-risking. For the first bond, USAID provided a loan guarantee to soften the perceived risk. For the latest offering, IIX made its own first-loss investment through its Women’s Catalyst Fund, which aims to drive more capital to underserved women in the COVID recovery.
  • Dive in

Circulate Capital invests $19 million in four companies reducing plastic waste in India.The 150 million tons of plastic in the ocean is growing by approximately eight million tons per year. Singapore-based Circulate Capital, a spin-off of Closed Loop Partners, invested $19 million in four technology companies in India helping curb the plastic waste crisis: plastic recycling pioneers Srichakra and Dalmia, waste-commerce firm Recykal and ocean-waste upcycling company Ricron. Circulate’s $106 million Circular Capital Ocean Fund is backed by Procter & Gamble, Dow, Danone, Unilever and others. Circulate plans to invest half of the fund in India’s waste management and recycling industry.

  • Circular portfolio. With the new investments, Circular Capital Ocean Fund has invested $39 million in six companies in India and one in Indonesia (see, “Catalyzing capital to prevent plastic waste”). Earlier this year, it backed Ahmedabad-based Nepra Resource Management, which collects and recycles dry municipal waste that would otherwise end up in landfills.
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Short takes. Dealflow is overflowing. A few of the transactions crossing our desks:

  • Net Purpose raises $2.5 million to quantify impact data. The London-based firm, co-founded by Samantha Duncan, ex- of LeapFrog Investments, and Dinah Koehler, ex- of UBS Asset Management, helps investors report on their impact and contribution to the U.N. Sustainable Development Goals. Illuminate Financial led the round.
  • Living Cities Blended Catalyst Fund invests in Aux21 Capital Partners. The consortium of 18 foundations and financial institutions is backing the Black- and immigrant-led venture firm to expand early-stage growth capital for under-represented entrepreneurs, primarily in U.S. immigrant communities.
  • Barbershop tech startup Squire raises $45 million in latest round. The New York startup helps independent barbershops get online. Iconiq Capital led the round with participation from Tiger Global and Trinity Ventures.
  • Career Karma raises $10 million for coding bootcamp platform. The San Francisco-based startup connects students, particularly people of color, with online coding programs. Initialized Capital, Emerson Collective, Softbank’s Opportunity Fund, Imaginable Futures, Kapor Capital, Unshackled Ventures, 4S Bay Capital and 61xth Event Fund joined the round.
  • India’s 5C Network clinches $1.2 million for low-cost radiology diagnostics. The Bangalore-based health tech startup has developed a platform for radiology diagnosis using artificial intelligence, which it says increases the speed and accuracy of diagnosis while reducing costs. Unitus Ventures and Axilor Ventures backed the startup’s Series A round.

Signals: Ahead of the Curve

Bridgewater Associates adds sustainable hedge funds. The $140 billion hedge fund, led by billionaire Ray Dalio, will launch two funds targeting stocks advancing the Sustainable Development Goals. “Sustainable investing is the top strategic agenda in the industry,” Bridgewater’s Carsten Stendevad told Bloomberg. The strategy will initially be available as a UCITS fund from Paris-based Lyxor Asset Management and eventually as a direct fund. Bridgewater’s move follows Chris James’ launch of Engine No. 1 and Jeffrey Ubben’s Inclusive Capital Partners, both activist hedge funds with sustainability theses (see, “There’s a new impact sheriff in town: activist hedge funds). 

New York to fossil fuels: get lost. The $226 billion New York State Common Retirement Fund will divest from oil and gas companies that do not meet standards for climate risk and transition readiness. The fund is trying to transition the portfolio to net-zero greenhouse gas emissions by 2040; it earlier divested from thermal coal companies.

BlackRock threatens to get tough on climate laggards – again. The $7.3 trillion asset manager is expected to unveil a more stringent engagement and voting policy. BlackRock’s Larry Fink has told CEOs, “Climate change has become a defining factor in companies’ long-term prospects.” But BlackRock has generally opted to put laggards on “watch lists” and often sides with management on climate-related votes. Competitors like Federated Hermes and LGIM are voting against directors if companies fail to take climate action, said Majority Action’s Eli Kasargod-Staub. “Anything short of this from BlackRock – such as a misguided focus on disclosure over action – will be an abdication of leadership from the world’s largest asset manager.”  

Agents of Impact: Follow the Talent

Stephanie Maier, ex- of HSBC Global Asset Management, joins GAM Investments as global head of sustainable and impact investment… Roots of Impact is hiring an associate… New Mexico Angels and UpSpring Associates seek an impact investing analyst intern… Global Innovation Lab for Climate Finance is seeking innovative solutions to unlock investment for climate and sustainable development challenges. 

Thank you for reading.

– Dec. 10, 2020