Greetings, Agents of Impact!
Hop on The Call: Capitalism Reimagined. Today’s Agents of Impact Call will take up the challenge of “Rewriting rules and designing policy for the stakeholder economy.” Join Leo Strine Jr., former chief justice of Delaware, PolicyLink’s Michael McAfee and Mahlet Getachew, U.S. Impact Investing Alliance’s Fran Seegull, Andres Vinelli of the Center for American Progress in conversation with ImpactAlpha’s David Bank and Omidyar Network’s Chris Jurgens, today at 10am PT / 1pm ET / 6pm London. Zoom right in.
Featured: Growth Markets
The fiduciary duty to invest in Africa. Many U.S. investors hear “Africa” and think “risk.” Joseph Boateng, the Ghana-born chief investment officer of Casey Family Programs, sees long-term growth. “U.S. investors who are not looking at investing in Africa are, at best, limiting their opportunity and, at worst, failing to fulfill their duties as fiduciaries,” Boateng argues in a guest post on ImpactAlpha. In the pandemic pullback, foreign direct investment in Africa fell 16% last year, to $40 billion. Boateng has helped push Casey’s allocation to Africa to 5% of its $2.8 billion endowment, compared to less than 1% for most U.S. asset owners. “Africa’s economic transformation and ever-increasing opportunities have not yet resonated with many institutional investors,” Boateng says, despite a young and fast-growing labor force, a rising middle class and a thriving start-up ecosystem.
Africa was home to at least half of the world’s 10 fastest growing economies last year (South Sudan, Benin, Rwanda, Ethiopia, Tanzania, and also Egypt). Investments in African infrastructure and private equity, Boateng says, have the potential to deliver outsized returns, but macroeconomic, political and currency risks can make investors wary. “Investors can mitigate many of these risks by seeking help from unconventional partners,” Boateng says, including development banks and international development agencies that can provide credit guarantees, concessional capital, transaction advisory funding and more to improve the risk-adjusted return profiles of investments in these markets. The U.S. government’s Prosper Africa initiative connects institutional investors with such risk-mitigation tools. Visits to African countries are helping managers of some of America’s largest pension funds, insurance companies and endowments find opportunities. Says Boateng: “If these fiduciaries aren’t truly considering Africa as an investment destination, can they truly consider themselves fiduciaries?”
Keep reading, “Consider yourself a fiduciary? Then it’s time to invest in Africa,” by Joseph Boateng on ImpactAlpha.
- Ground up. More outside capital can mean more flows to outside founders. “What we see is a huge disparity of funding in favor of advisory firms from the Global North, to the detriment of local expertise from the Global South, with a clear proximity advantage,” writes ScaleUp Africa’s Amma Gyampo in Quartz Africa. “There must be more intentionality around getting global funding resources to filter down to intermediaries, experts, and advisors on the ground and close to the action.”
Dealflow: Back to Work
Achieve Partners raises $180 million to boost apprenticeships and job placements. The Putting America Back to Work fund will acquire businesses that provide apprenticeships in healthcare, information technology and other industries facing skills shortages, and move newly trained workers into high-quality jobs. “We’re backing the buildout of an entirely new approach to sourcing and screening talent, and providing the vital last-mile training that workers need,” said Achieve’s Ryan Craig, who raised the fund with Daniel Pianko (see, “With policy prompts, private equity fund managers can drive social benefits, too”).
- Good jobs. Prudential Financial and Zoma Capital backed the fund, which aims to put 100,000 people into “good jobs” to which they otherwise would not have had access. “Providing training for in-demand jobs has the ultimate impact of providing economic mobility for Americans,” said Prudential’s Andrea Kaufman. Achieve was formerly known as University Ventures.
- Read on.
Impact tech VC firm Bethnal Green Ventures acquired by Connected Asset Management. The London-based early-stage investor launched in 2012 to invest in tech ventures tackling challenges in health, education, sustainability and democracy. It has backed 141 startups, including indoor farming tech startup LettUs Grow. Connected Asset Management, also in London, manages assets for Smart Pension, which invests on behalf of U.K. pension funds. The acquisition “opens up the ability for us to raise capital from the growing number of institutional investors who are committing to impact investing,” BGV’s Paul Miller told ImpactAlpha. “That will help us provide more follow-on investments to our portfolio companies, which is a gap we’ve seen in the European impact venture market.” BGV will continue to operate independently.
- Buy or build. Earlier this year, Munich-based Golding Capital Partners acquired boutique impact fund manager Sonanz, also in Munich, and Pathstone acquired Cornerstone Capital (see, “Cornerstone Capital acquired by Pathstone as impact advisory consolidation continues”).
- Check it out.
Land Accelerator provides a worm’s eye view of Peru’s conservation entrepreneurs. Blockchain forestry. Water planting. Superfoods. More than two dozen entrepreneurs participated in World Resources Institute’s second country-specific Land Accelerator program, called xPeru. The two-month program provides technical assistance and investment readiness support to startups and grassroots land conservation and restoration initiatives. Among the participants: Treejer is building a blockchain-based reforestation project funding platform. ACCA is reforesting native trees while helping replenish the natural water supply in wetland areas. Agroindustrias JE is restoring the native camu camu tree while helping Indigenous communities earn income from its fruit, a nutrient-rich superfood.
- Pay for success. Separately, Gabon received a $17 million payment from the U.N.-backed Central African Forest Initiative for its rainforest conservation efforts. The disbursement was the first tranche of a $150 million commitment by Norway to pay Gabon to cut back on illegal logging, create national parks and conserve its rainforests. The Central African country is 90% forested.
- Dig in.
Dealflow overflow. Other investment news crossing our desks:
- An investment trust of London’s Victory Hill Capital Advisers commits to investing $63 million in Brazil’s community solar installations alongside Energea Global, a retail investing platform for renewable projects.
- KKR’s Global Impact Fund acquires a majority stake in Education Perfect, a B Corp edtech venture operating in Australia and New Zealand.
- Brazilian solar financing company Solfácil raises $30 million from QED and Valor Capital to build out services for farmers.
- Aavishkaar Capital re-ups its investment in Indian logistics venture GoBOLT, backing its $20 million Series B round alongside Paragon Partners.
- Localized secures $2.2 million to help graduates from emerging market universities land jobs with international employers.
Signals: Sustainability Snapshot
Giving individual investors a bigger say in corporate stewardship. The success of the insurgent campaign to shake up ExxonMobil’s board shows the power of institutional firms acting in unison to buck management in proxy contests (see, “Victory for insurgents stuns Exxon as shareholders vote for a low-carbon future”). It’s a different story for the individual investors who own nearly 40% of publicly listed companies, writes Henry Shilling of Sustainable Research & Analysis in the firm’s latest market snapshot. Most individuals hold shares indirectly through mutual funds and ETFs, which effectively transfer voting privileges to fund managers. It’s a similar situation for many 401(k) and retirement plans. That gives power to a small group of Wall Street firms; five fund managers control 90% of index funds. Regulators are exploring changes to proxy-voting rules, but some funds are moving to give individual investors a say. The Index Funds S&P 500 Equal Weight fund (ticker: INDEX) polls investors on proxy resolutions to inform its voting decisions. Such models, says Shilling, could begin “to hold corporations and fund management firms to a higher standard by taking into consideration the views of all investors, no matter their size or their social and environmental views.”
- Shareholder power. Engine No. 1, the hedge fund that took on Exxon, is making proxy voting and activist campaigns a selling point for its newly launched Transform 500 ETF (see “Engine No. 1’s VOTE ETF aims to wield shareholder power for E, S and G”). Through its app, U.K.-based Tumelo shows investors the companies held in their pension funds, highlights issues such as gender equality and CEO pay, and lets them provide voting input to fund managers. As with INDEX, the input is advisory. Legal & General Investment Management is testing the product in the U.K. (see, “Leaders and laggards among asset managers on climate stewardship”).
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Agents of Impact: Follow the Talent
Ecofin names Jenn Pryce of Calvert Impact Capital, Michaela Edwards of Capricorn Investments, Rehana Nathoo of Spectrum Impact, Ron Cordes of Cordes Foundation, Brad Hilsabeck of TortoiseEcofin to its advisory board… Planet Tracker launches a Blue Recovery Bond Dashboard to show investors how bonds help replenish fish stocks and boost returns… Big Path Capital seeks an associate position in investment banking… Open Society Foundations is looking for an associate investment principal of impact investing in London.
BlackRock is hiring a sustainable investing business manager in New York… Climate Policy Initiative will demonstrate its new Net Zero Finance Tracker, initially focused on U.K. investors, today… CASA will pose four crowd-sourced questions to Grahame Dixie of Grow Asia on a webinar, tomorrow, June 30… Transform Finance is hosting “How philanthropy can support grassroots community engaged investment through grants and investments” with Nwamaka Agbo of Kataly Foundation, Greg Johnson of Rockefeller Foundation, and Jeff Rosen of Solidago Foundation, Thursday, July 1.
ImpactPHL and Impact for Breakfast are hosting “How impact investors can reduce the racial wealth gap by enabling employee ownership” with Sean-Tamba Matthew of Stevens & Lee/SES ESOP Strategies, Todd Leverette of Apis & Heritage Capital Partners, Philadelphia City Council member Derek Green and Bill Stockwell of Stockwell Elastomerics, Tuesday, July 13 (see, “Employee ownership to get a boost from Apis & Heritage’s buyout fund”).
Thank you for your impact.
–June 29, 2021