The Brief | March 28, 2022

The Brief: Investing in Ukraine, impact consolidation in Europe, comunidad partners in Texas, EV battery production in Canada, human-centered climate action

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Greetings, Agents of Impact!

Tomorrow’s Call: Political risk and impact investing in Ukraine and other conflict zones. On Agents of Impact Call No. 40, we’ll hear from Jessica Bleyzer of the private equity firm SigmaBleyzer, which has invested $1 billion in Ukraine over the past 25 years and is now leveraging its history and experience in-country to provide critical humanitarian assistance. Daniel Kozlov of Moscow and San Francisco-based Global Venture Alliance is working with impact entrepreneurs in both Ukraine and Russia. Media Development Investment Fund’s Harlan Mandel is supporting independent news outlets in Ukraine and other conflict zones. Open Road Alliance’s Caroline Bressan is helping impact enterprises weather unforeseen shocks to continue their work in Ukraine and elsewhere. 

  • Rebuilding Ukraine. “Right now, there’s not a lot of opportunity for impact investing because the focus is so much on safety, life and humanitarian aid,” says Bleyzer, whose parents emigrated from Ukraine. “There will absolutely be an incredible amount of opportunity for impact investing when we are able to start rebuilding this country, when the Russians leave this sovereign nation.”
  • Independent news. “They’re defiant,” Mandel says of Media Development Investment Fund’s current and former investees in Melitopol, Kherson and Lviv. Other investors run away from political risk. MDIF runs toward it.
  • OMG moments. Open Road has loaned $50 million to help more than 100 social enterprises, including Hala Systems, which is now deploying its early-warning systems to save civilian lives in Ukraine.
  • Answer the Call. Join these Agents of Impact and share your own thoughts in a timely discussion of impact investing in challenging environments, tomorrow, Mar. 29 at 10am PT / 1pm ET / 6pm London. Last chance to RSVP.

Featured: Impact M&A

Acquisitions in Europe reflect investors’ appetite for private debt in emerging markets. A trio of Swiss impact investors launched two decades ago with similar missions of boosting financial inclusion in emerging markets. In January, Swiss impact investing pioneer responsAbility was acquired by London-based M&G. Zurich-based BlueOrchard sold a majority stake to Schroders in 2019. And Geneva-based Symbiotics has independently grown to $2.9 billion in assets under management with a growing stream of private mandates. The common thread: European investors’ growing appetite for impact investments, including loans to microfinance and agrifood institutions in emerging markets that were once considered “too risky” for institutional investors. “Everything connected to green and sustainable financing is high in demand,” says Symbiotics’ Mattia Corato. “If you mix green or sustainable use of proceeds with the emerging markets dimension – that’s a very powerful offering.”

Dealflow: Community Finance

Comunidad Partners raises $300 million for social housing. The Austin-based fund manager attracted equity commitments from U.S. pension funds, university endowments, foundations and family offices. Comunidad Partners, owned entirely by minorities and women, will invest its first Comunidad Social Impact Multifamily Assets fund in workforce and affordable housing in underserved communities in Sun Belt cities. The firm will provide “cultural upgrades, community investment initiatives and social impact programs that aid in building a sense of community and improving residents’ lives,” said Comunidad’s Antonio Marquez.

  • Returns on inclusion. Social programs at Comunidad’s properties include English language lessons, financial wellness, jobs training and placement, after-school tutoring, and health and wellness services. Comunidad has spent $110 million to acquire 11 housing communities in Atlanta, Austin, Dallas-Fort Worth and the Carolinas.
  • Check it out.

Stellantis and LG Energy Solution’s joint venture will invest $4.1 billion in EV batteries. Billions of dollars have been committed to the electric vehicle transition by nearly every major global automaker, including GM, Ford and even Toyota. A laggard: Stellantis, formed by last year’s merger of Fiat Chrysler and Groupe PSA, which includes brands such as Chrysler, Jeep, Dodge, Ram and Maserati. To catch up, the Amsterdam-based automaker enlisted LG Energy Solution to set up a large-scale EV battery manufacturing plant in Canada, which is expected to launch operations in 2024.

  • EV infrastructure. The plant is expected to produce at least 45 gigawatt-hours of battery capacity per year and create approximately 2,500 new jobs. It will supply lithium-ion batteries for the five million battery-powered electric vehicles Stellantis is looking to sell by 2030. LG Energy Solution already had plans to invest around $4.6 billion in EV facilities in North America.
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SparkMeter scores $10 million for grid management in emerging markets. Washington, D.C.-based SparkMeter has installed low-cost energy metering systems in more than 150,000 households and businesses in two dozen countries in Asia, Africa, and Latin America. The company works with emerging market microgrids operators and utilities to provide data on grid reliability. The financing round, which brings SparkMeter’s total raised to $22 million, was backed by existing investors Breakthrough Energy Ventures and Clean Energy Ventures.

  • Decarbonized grid. “The grid of the future will need to be reliable, responsive and secure as global electricity demand surges,” said Clean Energy Ventures’ Daniel Goldman. SparkMeter is helping countries in Africa and Asia “decarbonize their energy systems while expanding equitable energy access.”
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Dealflow overflow. Other investment news crossing our desks:

  • Mitsui & Co. will invest €575 million ($631.6 million) for a 27.5% stake in Mainstream Renewable Power, which is expanding its portfolio in the Americas, Africa and Asia-Pacific.
  • Kwik raises $2 million in Series A funding to provide financial and last-mile delivery services to online merchants in Africa.
  • SWAP Energy raises a pre-Series A round to build a battery-swapping network for electric motorcycles in Indonesia.

Impact Voices: Climate Justice

A human-centered approach for impact investing in climate action. Centering those most vulnerable to climate change can future-proof investments by mitigating risk and enhancing resilience. Such strategies can tap under-explored climate finance opportunities in underserved regions and communities. “While the long-term benefits are clear, we have a long way to go to embed equity in climate impact investing, especially from the inside out,” Dalberg’s Kusi Hornberger, Kaylyn Koberna and Lauren Olosky write in a guest post on ImpactAlpha. More than three-quarters of climate investments in 2020, for example, had no gender-focused elements. Less than half of the 89 fund managers with a climate focus in the ImpactAssets 50 have gender parity in their teams. Dalberg’s framework of what you invest in, how you invest, and who you are as an investor can help integrate diversity and inclusion into climate investments.

  • Bridging the equity gap. Cambridge, Mass.-based Sunwealth dedicated 27% of its investments in 2021 to low-income community solar projects. MacArthur Foundation, Open Societies Foundation and other funders have signed the Donors of Color Network’s Climate Funders Justice Pledge, committing at least 30% of their climate funding to BIPOC-led climate justice organizations. New York-based Circulate Capital incorporates improved livelihoods in its impact measurement framework.
  • Keep reading, “A human-centered approach for impact investing in climate action,” by Kusi Hornberger, Kaylyn Koberna and Lauren Olosky.

Agents of Impact: Where to Meet

Don’t miss these ImpactAlpha partner events:

  • Phenix Capital is convening the Impact Summit Europe in The Hague, Mar. 29-30. Register now.
  • AVCA is convening its annual conference, “Private Capital in Africa at a Crossroads,” in Dakar, Apr. 25-29. Register today.
  • Island Innovation is hosting its Island Finance Forum virtually, Apr. 25-29. Register for free.
  • ImpactPHL is convening “Total Impact: Investing for New Economies,” in Philadelphia, May 16-17. ImpactAlpha subscribers get $300 off with code IMPACTALPHA. RSVP today.

Thank you for your impact.

– Mar. 28, 2022