Greetings, Agents of Impact!
Featured: SOCAP Dispatch
Dealmakers seize the return of SOCAP to move capital toward impact. Tired: talking. Wired: doing. Impact fund managers and startup founders, placement agents and headhunters worked the halls and terraces of San Francisco’s Yerba Buena Arts Center to make connections and close deals at SOCAP, as the in-person event convened after a two-year hiatus. “It’s the most deal activity I’ve seen in all my years at SOCAP,” Big Path Capital’s Shawn Lesser told ImpactAlpha. SOCAP’s relocation to the city center evoked nostalgia for the Fort Mason waterfront, but the familiar crowd adapted quickly. “The best days are ahead of us,” said Geoff Davis of Sorenson Impact Center, which took over management of SOCAP after a restructuring this spring. “We are in the early days of a massive structural shift in the way our economy works, so this is needed more than ever.” Among the highlights:
- Place to be. Next door at the Moscone Center West, Techcrunch hosted its annual Disrupt startup conference. SOCAP and Disrupt “should merge,” quipped Rakesh Apte, an innovation director at Dell, as he passed through the Yerba Buena garden. One Disrupt attendee, entrepreneur Gwyneth Borden from credit recovery startup Remynt, crashed ImpactAlpha’s SOCAP happy hour. “They told me this is where the investors are.” Recruiter Kate Shattuck of Korn Ferry said the talent pool at the conference was so deep that she could find prospects for her clients just by positioning herself near the registration desk.
- Good jobs. Investors should insist on knowing the status of the employees of the companies they invest in, Lafayette Square’s Antony Bugg-Levine said in the “Workers as Stakeholders” panel. Jobs for the Future stood up JFF Ventures as a new impact investing arm to manage funds that invest in companies improving economic mobility for workers in low-wage jobs. JFF Ventures will manage ETF@JFFLabs (now JFF Ventures Fund I), a $25 million fund that has backed 35 companies including ChargerHelp, Forage and AdeptId. A new corporate innovation council, including Walmart, Northwestern Mutual and Capital One, will provide founders with insights into the needs of employers. JFF Ventures will launch a second fund later this year.
- Regeneration rejuvenated. A perfect storm of Inflation Reduction Act funding, carbon credit markets and surging demand for climate solutions has put wind in the sails of the regenerative agriculture movement. “It’s one of the biggest opportunities in climate and impact investing,” said Michael Gevertz of Propagate, which last month raised $10 million to help farms transition to agroforestry. Gevertz was fresh from last week’s Regenerative Food Systems investment forum in Denver, where he joined more than 300 participants. “Next year it’ll be 3,000 people,” he said. Vibrant Data Labs’ Eric Berlow highlighted financing gaps in his presentation of the new Climate Finance Tracker, developed with ImpactAlpha and other partners.
- Web3 use cases. Not a peep about the “crypto winter.” Impact’s web3 enthusiasts were abuzz about blockchain applications in nuclear disarmament and arms control verification, transparency in carbon markets, and traceability in plastic recycling. “We have a chance not to just evolve a market, but create an entirely new one,” says Lyndon Burford of Path Collective, who wants to use the technology underlying cryptocurrencies for disarmament verification. Delton Chen promoted his concept of a Global Carbon Reward as a way to mobilize trillions for the low-carbon transition.
- Share your SOCAP takeaways. Email us at [email protected] (or just hit “reply”) and we’ll round them up next week.
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Dealflow: Conservation Finance
New Forests secures $200 million from development finance institutions to conserve Africa’s forests. Nearly 10 million acres of forests in Africa – one of Earth’s most important carbon sinks – are disappearing each year. British International Investment, Norfund and Finnfund are investing a combined $200 million in New Forests’ open-ended African Forestry Impact Platform. AFIP will invest in Africa-based plantation forestry companies and projects, with a focus on forest conservation, land restoration, and expansion of community-based forestry programs. Sydney-based New Forests manages 2.7 million acres of forestlands for sustainable timber production and conservation (see, “Packard Foundation pushes forest fund beyond business as usual”). Mitsui & Co. and Nomura agreed to acquire New Forests earlier this year.
- Community based. The fund “will increase funding for nature-based solutions, the supply of sustainable wood, [and] restore natural capital while also boosting jobs within rural communities,” said Clarisa De Franco of BII, which committed $75 million in the fund. Norfund allocated $76 million; Finnfund allocated $48 million. New Forests plan to raise an additional $300 million from institutional investors.
- Climate + gender. The African forestry fund aims to make an impact in four areas: climate change mitigation, biodiversity conservation, gender and diversity, and communities and livelihoods. The fund will invest at least 30% of its assets in businesses with an explicit gender lens. “Addressing the climate emergency in Africa must include gender-smart actions,” De Franco said. In its first deal, AFIP will acquire Green Resources, a private Norwegian forest development and wood processing company managing 94,000 acres of pine and eucalyptus plantations in Tanzania, Uganda and Mozambique.
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Dealflow overflow. Other investment news crossing our desks:
- The Biden Administration will award $2.8 billion in grants to 20 electric vehicle manufacturing companies, including low-carbon lithium producer Lilac Solutions, to boost EV production in the U.S.
- Steve Balmer, billionaire owner of the L.A. Clippers NBA team and former CEO of Microsoft, says he and his wife Connie Ballmer will team up with four financial partners, including Goldman Sachs, JPMorgan Chase and Black-led Fairview Capital, to invest $400 million in Black fund managers.
- Swiss global asset manager Capital Dynamics secured €521 million ($509.2 million) to invest in solar and other clean energy projects in Europe.
- Cairo-based MaxAB raised $40 million to digitize inventory sourcing, delivery, payments and credit for informal and small retailers in Egypt and Morocco.
Signals: Climate Finance
Development finance institutions face calls for reform in the wake of cascading climate and energy crises. Embattled World Bank chief David Malpass made an about-face at the bank’s annual meetings last week, copping to the reality of manmade global warming and the need to fund global climate action. The Trump appointee, who faced withering criticism for his refusal to acknowledge climate change and for the bank’s underwhelming climate response, may have been trying to save his job. But the dust up underscores a deeper truth: development finance, from the World Bank and International Monetary Fund down to regional development banks, are not meeting the urgent challenges of a rapidly changing climate and spiraling costs of energy and food sparked by Russia’s invasion of Ukraine. “The time is now for much more ambitious and creative financing from the World Bank and the entire multilateral development banking system to support global economic resilience in the face of compounding health, food, fuel, and climate crises,” Rockefeller Foundation’s Mike Muldoon said last week while announcing a grant fund to catalyze climate capital from development finance institutions.
- Calls to action. Barbados Prime Minister Mia Mottley’s “Bridgetown Agenda” calls for long-term concessional financing, a $1 trillion increase in multilateral lending for climate resilience, and the mobilization of up to $4 trillion for climate mitigation and adaptation in low- and middle-income countries. The Natural Resources Defense Council and other organizations urged the World Bank to shift the billions of dollars it invests in fossil fuel projects to climate mitigation and adaptation. The World Bank “could unleash tens of billions of dollars each year, if it moved more assertively to finance projects addressing climate change,” said NRDC’s Jake Schmidt. Instead, the bank “is sitting on capital that could make a real difference in people’s lives and livelihoods.”
- Keep reading, “Development finance institutions face calls for reform in the face of cascading climate and energy crises,” by Amy Cortese on ImpactAlpha.
Agents of Impact: Follow the Talent
Jules Kortenhorst, formerly CEO of RMI, will join Vision Ridge Partners as partner… Harvard Business School’s International Foundation for Valuing Impacts seeks a chief research officer and a director of market development… Convergence is hiring an interim senior associate of finance and operations and several other roles in Toronto… Common Trust is looking for a remote financial analyst.
Chan Zuckerberg Initiative is looking for a program operations associate in Redwood City, Calif… In New York, UN Global Compact Network USA is recruiting an environment and climate program associate, and the Clinton Foundation seeks a senior community manager of climate and sustainability… Impax Asset Management will rebrand its Pax World Funds as Impax Funds, effective Dec. 31.
Village Capital will select 20 startups working to address key issues in climate change, healthcare, wellness and economic mobility to join its ADAPT accelerator program, which is backed by the Bill & Melinda Gates and MetLife foundations… Apex Group launches Apex Foundation, a nonprofit that will support grassroots projects in forest conservation, women’s empowerment and education, and social mobility.
Thank you for your impact!
– Oct. 20, 2022
