The Brief: ESG in the C-Suite, social infrastructure investing, affordable internet in Myanmar, alt-payday loans, antidepressant headsets



Greetings, Agents of Impact!

Agents of Impact Call No. 10: Reporters’ Roundtable. The market underestimates climate risks and overestimates risks in affordable housing, smallholder agriculture and other sectors. On The Call next week, ImpactAlpha’s editors and “special agents” of impact will chew on the ‘Big Nine’ themes driving ImpactAlpha coverage, including No. 3: Risk, Adjusted. Join a lively subscribers-only conversation that will take you inside ImpactAlpha’s thinking on Thursday, Aug. 1st, at 10:00 am PT / 1:00 pm ET / 6:00 pm London. RSVP today.

Featured: ImpactAlpha Original

Goldman Sachs’ new Sustainable Finance Group charts ESG rise to the C-suite. “Two important factors – inclusive growth and climate transition – had become significant drivers of growth, risk, and operational efficiency for businesses and investors and thus, for Goldman Sachs,” John Goldsteinwrites to explain his new role as head of Goldman’s newly created Sustainable Finance Group. Goldstein is a co-founder of Imprint Capital, which managed $550 million in assets when it was acquired by Goldman in 2015. Since then, he has helped build the ESG and impact investing business within Goldman’s investment management division to more than $27 billion in assets. The new group “will coordinate sustainability across financing, advisory, risk management, asset management and investing,” Goldman said in a statement that offered little detail. “In the months ahead, we will develop specific goals and objectives for our work in this area” the firm said. In his new role, Goldstein says, “I’m still going to bike the kids to school and myself to work (always) and meetings (when I can). What’s new is getting to draw from and contribute to a broader set of clients and colleagues.”

  • Sustainability alpha. One of Goldstein’s jobs “is to help Goldman’s investors do better at doing what they do by incorporating environmental, social and governance into how we invest for all our clients,” Goldstein told ImpactAlpha in a podcast that was part of our Beyond Tradeoffs series with Omidyar Network. “That’s not for clients who care about these factors, but for clients who care about making money on risk-adjusted basis,” he says (read, and listen, to ImpactAlpha’s podcast interview with Goldstein, “Goldman Sachs: Big investors press asset managers to integrate ‘ESG’ and impact across portfolios”).
  • ESG in the C-Suite. In the last few years, the firm has gotten more sophisticated questions on ESG and sustainable finance from its largest clients, and senior colleagues at Goldman, Goldstein says. “These questions had risen to the C-suite and those executives wanted the same rigor, insight, and capabilities supporting them on ESG and impact that they sought on any other business or investment topic.”
  • Agents of impact. The new group will include Kyung-Ah Park, who will continue to lead the firm’s environmental markets and innovative finance work. Kara Succoso Mangone will serve as chief operating officer.
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Dealflow: Follow the Money

Franklin Templeton’s social infrastructure fund invests in hospitals, schools and care facilities. The $700 billion asset management firm believes access to social services are essential to economic growth, and that building and maintaining the facilities to house those services can be good investments. Franklin Templeton has raised more than €150 million ($167 million) for its open-ended social infrastructure fund launched last year to acquire properties for justice, education and healthcare services. It has made six investments through the fund, including a German university complex, a Swedish school, Italian and Danish hospitals, and health center and nursing home facilities in the U.K. Terms were not disclosed for the new deals, which bring the total Social Infrastructure Fund portfolio to nine. The company told IPE Real Assets it has a pipeline of €500 million in deals. Check it out.

Frontiir raises $30 million to expand internet access in Myanmar. Access to digital services remains low in the southeast Asian country of 53 million people, despite recent expansion of mobile broadband. Yangon-based Frontiir’s Myanmar Net is the country’s fastest growing internet service. UK development finance institution CDC invested $30 million in its first direct equity investment in Myanmar. Expanding access to affordable internet service is a key to Sustainable Development Goal No. 9 (“build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”). “We firmly believe in the power of connectivity to help build the economic strength of communities and businesses,” said CDC’s Srini Nagarajan. The investment will help Frontiir more than triple its staff of 1,600 and expand to 22 cities and towns by 2022. Dig in.

Flow Neuroscience raises €1.3 million for anti-depressant headset. The Swedish mental health tech startup is targeting the 25% of Europeans suffering from depression each year. The investment from Khosla Ventures will fund clinical studies for Flow’s brain stimulation headset, which has achieved similar results to antidepressant drugs without the side effects.

Aura closes $29 million in debt for its low-cost alternative to payday loans. Angel Island Capital backed the fintech firm, which secured a $10 million convertible note from Prudential Financial’s impact investing group in June.

Agents of Impact: Follow the Talent

ImpactAlpha is hiring: Director of Growth. Subscription revenues from passionate Agents of Impact have pushed ImpactAlpha past a crucial milestone: financial sustainability. Our new Director of Growth will drive subscription marketing to increase conversions and grow recurring revenues so we can serve such agents even better. Join ImpactAlpha’s team (and spread the word).

Bolsa Social is looking for an investment director in Madrid… Unreasonableis recruiting a venture selection associate and global programs producer in Boulder, London or New York… ImpactAssets is hiring a senior associate of custom investments… Duke University’s Center for the Advancement of Social Entrepreneurship seeks a writer and marketing coordinator… ‘Open sessions’ at SOCAP19 include “Cooperatives as a Catalyst for Empowerment and Racial Equity,” “The State of Alternative Ownership and Finance in the U.S.” and “Scaling Impact and Resilience in Emerging Markets via Local Funds.” ImpactAlpha subscribers can register with code MP_ImpactAlpha to get $250 off.

– July 25, 2019

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