Greetings Agents of Impact!
In today’s Brief:
- Apis & Heritage’s employee-led buyouts
- Brownfield infrastructure in global growth markets
- US clean energy incentives on the chopping block
Featured: Ownership Economy
Apis & Heritage aims to help business owners ‘exit responsibly’ – to their employees (podcast). The idea that a private equity firm would buy out a company to hand it over to workers was outlandish three years ago, when Apis & Heritage Capital Partners acquired Accent Landscape Contractors and turned it over to 114 new worker-owners. Accent’s founder, Cameron Stevens, had multiple offers from competitors and other strategic players for his El Paso, Texas-based commercial landscaping business. He suspected that the bidders had plans to maximize the company’s profitability through layoffs and flip the business. “He didn’t want to sell to the sharks. He worried about what was going to happen to his workers, some of who had been with him for 35 years,” A&H’s Todd Leverette told Eric Horvath and Lucas Turner-Owens on Impact(ed), part of the ImpactAlpha Podcast Network. “When we introduced the idea of selling to his workers, he was floored by the opportunity.” Accent’s employee-ownership conversion will over the years give the worker-owners, most of whom are low-wealth and identify as people of color, roughly $120,000 to pay for their kids’ college tuitions or pad retirement savings. A&H has struck five such employee-led buyouts through its $58.1 million inaugural Legacy Fund. The Washington, DC-based fund manager is seeking to raise $250 million for a second fund to create 3,000 business worker-owners over five years.
- Employee-led buyouts. The fund has financed the transition to ownership for 421 low- and moderate-income workers, who have so far accumulated a combined $416,000 in their ESOP accounts. A&H is among the firms with buyout credit strategies that help owners exit more quickly and transfer equity to employees over time. A&H’s employee-led buyout model, which functions similarly to an employee stock ownership plan, or ESOP, creates S-Corp ESOPs, 100% employee-owned companies that benefit from federal and state tax exemptions, including an exemption from federal income tax on earnings. Leverette calls the strategy “exiting responsibly” and pitches it to retiring business owners who want to preserve the legacy of their businesses by selling to their longtime, loyal employees. “There is a very strong investment model for investing debt into these companies, making them ESOPs, eliminating their tax liability,” says Leverette.
- Mezzanine debt. Investors in the first Legacy Fund include the Rockefeller, Ford, Skoll, Robert Wood Johnson, Kellogg, McKnight and Sorenson Impact foundations and other impact investors. A&H tells ImpactAlpha that major investors in fund one have re-upped in the second fund. Through the new Legacy Fund, A&H will target larger companies, with the aim of creating more wealth for workers. “These businesses typically have more sophisticated finance and HR infrastructure, which enable smoother transitions to employee ownership and help unlock greater value though the ESOP structure,” A&H’s Tobi Adewodu tells ImpactAlpha. A&H will underwrite larger checks for mezzanine debt, which blends features of debt and equity, allowing a business to gain access to capital without diluting ownership. In the podcast, Leverette explains how the mezzanine debt structure enables workers to acquire 100% of the equity of the company. “In our model, workers do not have to pay anything.”
- Keep reading, “Apis & Heritage aims to help business owners ‘exit responsibly’ – to their employees,” by Roodgally Senatus on ImpactAlpha. And listen to “Financing worker ownership conversions with Todd Leverette” from Impact(ed), part of the ImpactAlpha Podcast Network. With the W.K. Kellogg Foundation, ImpactAlpha is lifting up investment strategies that are expanding opportunity in today’s complex environment.
Dealflow: Green Transition
Actis raises $1.7 billion for brownfield infrastructure in emerging markets. London-based infrastructure investor Actis raised $1.7 billion for its second Actis Long Life Infrastructure Fund, or ALLIF2, which invests in growth markets in emerging markets. The fund attracted a pool of new and existing investors including pension funds, funds of funds, insurance companies and sovereign wealth funds. The new fund tops Actis’ first Long Life Infrastructure Fund, which raised $1.2 billion in 2019. It is Actis’s first fundraise since it was acquired by General Atlantic last year.
- Sustainable infrastructure. Under its long life infrastructure strategy Actis buys and improves “brownfield” infrastructure projects, including renewable energy assets, electricity transmission and distribution, district cooling, and digital infrastructure, that generate predictable revenues over a 10-year investment period. ALLIF2 has already deployed half of its capital, including the acquisition of 21 solar assets managed by India’s Stride Climate Investments in March. The fund completed two acquisitions of Brazilian electricity transmission assets last year. “At a time of macroeconomic uncertainty across Western economies, we are seeing investors increasingly turn to globally diversified strategies,” said Actis’ Neda Vakilian.
Dealflow overflow. Investment news crossing our desks:
- Canada’s Power Sustainable launched a $330 million private equity fund focused on decarbonizing energy, industrials, transportation and the built environment. Funding came from its parent, Power Corporation of Canada, alongside insurer Canada Life and others. (ESG News)
- Impact investors Ocean 14 and S2G Investments jointly invested in Colombia’s Enthos Circular Feed Technologies, which produces animal feed by farming insects. (AquaFeed)
- Indonesian microfinance provider Amartha received a $55 million loan from Swedfund, Finnfund and the Belgian Investment Company for Developing Countries to lend to rural female entrepreneurs. (Finnfund)
- The UK’s Konexa, Climate Fund Managers and Norfund invested $3.6 million to set up solar plants to power Nigerian Breweries in Nigeria’s Lagos and Enugu states. (Climate Fund Managers)
- The European Investment Bank and Kenya’s Family Bank are putting up €50 million ($56.2 million) each to expand lending to women-owned and -led enterprises and youth entrepreneurs in Kenya. (EIB)
Signals: Climate Policy
The surprising states leading the US to wind and solar energy abundance. Congressional leaders in Washington, DC, are drawing up budget plans that eliminate clean energy incentives. That reinforces the assumption that renewable energy is hyper-partisan. The reality on the ground tells a different story. The solid-red heartland states of Iowa, South Dakota and Kansas lead the US in non-hydro clean energy generation, nearly all of it from wind power. The three states generate more than half of their in-state electricity from clean energy sources; Iowa and South Dakota surpassed 60% clean energy for the first time last year. “Polling has shown consistent public support for renewables across both Democratic and Republican demographics,” says Ron Pernick of Clean Edge, which has tracked states’ clean energy generation since 2010 (disclosure: ImpactAlpha contributor Clint Wilder works with Clean Edge).
- Chopping block. Republicans in Washington are seeking to ax clean energy incentives created by the Biden-era Inflation Reduction Act to make way for tax cuts. Most IRA tax credits would be eliminated, phased out or made unworkable under the proposed budget. The popular 45X Advanced Energy Manufacturing Credit, which has catalyzed more than $200 billion in new investment, mostly in Republican-led states, would be phased out by 2031; new provisions would block most companies from using it. Unobligated funds for the Energy Department’s $400 billion Loan Programs Office and the embattled $27 billion Greenhouse Gas Reduction Fund would be rescinded. Also on the chopping block: Environmental Justice Block Grants, tax breaks for appliances and EVs, and the direct-pay and transferability options, which enabled a broader group of developers to access IRA credits. Evergreen Action, which has put together a handy cheat sheet, is among the groups urging concerned citizens to contact their representatives. More.
- Policy push. State policy leadership has long been a key driver of clean energy generation. Back in 1983, Iowa enacted the nation’s first renewable portfolio standard, or RPS – a state mandate to generate a specified share of electricity from renewable sources. By last year, 29 states and the District of Columbia had renewable portfolio standards in place. Clean energy progress in Texas, which has surpassed California in total renewables generation, is threatened by two bills in the state legislature (for background, see “Don’t mess with Texas’s lead in the low-carbon energy transition”). The bills would require existing and new solar and wind farms to install backup battery storage or natural gas-fired power to ensure continuous power. The costs could shut down dozens of operations and gigawatts of clean power.
- Keep reading, “The surprising states leading the US to wind and solar energy abundance,” by Clint Wilder on ImpactAlpha.
Agents of Impact: Follow the Talent
MacArthur Foundation names Bola Olusanya, former chief investment of The Nature Conservancy, as vice president and chief investment officer to manage its $9 billion endowment… Pegasus Capital Advisors appoints Jean Rogers, former senior managing director at Blackstone and the founder of the Sustainable Accounting Standards Board, as senior operating advisor.
Chris Thompson, previously with New York Life Investments, joins the Heron Foundation as a senior director of investments… The Purpose Trust Ownership Network welcomes Elizabeth Corvi, previously with Monterey Bay Aquarium Research Institute, as program manager… Catholic Relief Services seeks an innovative finance director… Creo is hiring a senior operations manager.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– May 14, 2025
