Greetings, Agents of Impact!
Signals: Ahead of the Curve
Generate’s Jigar Shah tapped to rev up the Department of Energy’s loan office. The lending program, mostly moribund for the past four years, “is back in business,” declared Energy Secretary Jennifer Granholm. Shah pioneered no-money-down solar installations at SunEdison and went on to co-found Generate, an investor, owner and operator in microgrids, HVAC systems, biogas converters, charging depots, wastewater treatment and other categories of sustainable infrastructure (see, “Generate Capital raises $1 billion to scale sustainable infrastructure-as-a-service”). The department’s loan programs office has $40 billion in capital to speed the low-carbon transition. “He’s going to help us put together an indomitable portfolio of investments for American taxpayers, that will help us tackle climate change and create jobs,” Granholm said. “We’re ready to invest in advanced vehicles, carbon capture, advanced reactors and so much more.” The office, established by the 2009 stimulus bill, supported solar makers – including, famously, Solyndra – and helped Tesla build its first factory, but languished under the Trump administration. Shah will step down as Generate’s president. Scott Jacobs remains CEO; chief investment officer Matan Friedman will re-join the company’s board.
- In his own words. “We definitely need 25 million new people to get to work to be able to decarbonize at the scale that we need to decarbonize. That’s a lot of jobs, and those are a lot of good-paying jobs,” Shah said on ImpactAlpha’s Agents of Impact podcast in January (see “Jigar Shah: What’s next for sustainable infrastructure? Deployment, deployment deployment”). “You have a lot of tailwind from political leadership saying, ‘It’s the right thing to do, and it’s the right time to do it.’”
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Greening sovereign debt to tackle converging crises. A majority of low-income countries need to restructure their loans in a brewing sovereign debt crisis stemming from the COVID pandemic. Looming mass extinctions and climate emergencies signal the accelerating stress on natural systems as well. Can solutions to one crisis address the others? A Nature and Climate Sovereign Bond Facility proposed by Finance for Biodiversity, aims to build on investor interest in green debt and create nature-performance bonds and other instruments that align payments with environmental outcomes. “This could be a key tool in creating a positive nature-capital outcome while avoiding default,” F4B’s Louis de Montpelier told ImpactAlpha. The $64 trillion sovereign debt market has been slow to integrate environmental, social and governance, or ESG, factors.
- Inclusive, green debt relief. Angola, Argentina, Belize, Ecuador, Kenya, Lebanon, Suriname and Zambia are among the countries facing debt restructuring. Finance for Biodiversity calls for an international organization to set standards and seize “an historic opportunity for aligning sovereign debt relief with nature and climate outcomes” (see “Accelerating climate emergency spurs innovative financing for adaptation”).
Abacus acquires Robasciotti & Philipson to meet client demand for social justice strategies. Abacus’ Brent Kessel and Rachel Robasciotti of Robasciotti & Philipson collaborated on Due Diligence 2.0 (see, and listen to, “The Reconstruction: How unlikely partners came together to fight racial bias in asset allocation”). Now they are merging their California-based advisory firms. Santa Monica-based Abacus, with $3.8 billion in assets under management, will absorb San Francisco-based R&P, which advises more than 110 households representing $130 million in assets. “This partnership enables us to leverage our platform and resources to further advance our clients’ social justice-driven investment strategies,” says Kessel (see, “Brent Kessel: Expanding what’s possible with money”). Robasciotti and Maya Philipson will join Abacus but continue to separately run Adasina Social Capital, which they created to connect financial markets with movements for economic and racial justice.
- Social justice lens. Robasciotti last year launched the Adasina Social Justice All Cap Global ETF. Adasina developed the screening criteria by working with social justice activists to identify issues affecting their communities. “This approach gives us a data advantage relative to other solutions,” she said at the time.
- M&A. The deal is another signal of the consolidation among financial advisory firms as they beef up impact investing capacities. Earlier this week, Pathstone acquired Cornerstone Capital Group.
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Sponsored by Conduit Capital and Conduit Connect
A new fund to launch the decade of purpose. Looking to meet the appetite of retail and professional investors for genuine and measurable impact investments, Conduit Capital and Ascension Ventures have launched The Conduit EIS Impact Fund to invest in high-impact businesses sourced by Conduit Connect.
- Global goals. The fund is focused on scaling companies aligned with the U.N. Sustainable Development Goals and will leverage the U.K.’s EIS tax relief. The key investment themes will be climate, education, health and wellbeing, financial inclusion and economic opportunity.
- Impact screen. A pre-screening process, developed by Conduit Connect in collaboration with Deloitte, will ensure the scalable SDG-aligned impact of businesses supported by the fund. Businesses will have access to the broader support and network of Conduit Capital, an unparalleled source of impact solutions and innovation
- Key information. The target first close is £3 million ($4.2 million) on April 5, with a total target fund size of £5 million, with a minimum ticket of £25,000 for eligible investors. The target return is 2.5x net of fees and excluding tax relief.
- Go deeper. To learn more about the fund, see the full article here.
Disclaimer: ImpactAlpha does not endorse or recommend any particular investment product or service.
Dealflow: Follow the Money
Chicago-based venture funds aim to bridge funding gaps for overlooked founders. Three-quarters of the record $130 billion in U.S. venture capital funding last year went to startups in California, New York and Massachusetts. Chicago Ventures, Lightbank and Cleveland Avenue are looking to even the playing field with new funds based in and focused on the Midwest.
- Seed stage. Chicago Ventures Fund III raised $63 million to lead seed investment rounds in overlooked founders whose ideas other investors dismiss as “unscalable, niche and unproven,” said Chicago Ventures’ Lindsay Knight.
- Climate tech. Lightbank II secured $180 million from institutional, family office and high-net-worth investors to make pre-seed, seed and Series A investments in climate and other tech startups.
- South and West. Cleveland Avenue raked in $70 million for its Cleveland Avenue State Treasurer Urban Success fund, or CAST US. The impact fund is targeting Black, Latinx and women-owned businesses specifically in Chicago’s South and West side neighborhoods. The Illinois Growth and Innovation Fund, a billion-dollar impact investing vehicle created by State Treasurer Michael Frerichs, committed $16 million. Benefit Chicago, a collaboration between the McArthur Foundation, Chicago Community Trust and Calvert Impact Capital, invested $10 million.
Therma secures $10.2 million to cut carbon in the cold chain. Two of the most significant ways to cut greenhouse gases: reduce food waste and improve refrigeration. San Francisco-based Therma’s refrigeration-monitoring device could “significantly reduce emissions across the $1 trillion global cold-chain,” the company says. Its sensor is designed to minimize commercial food and industrial waste with alerts about equipment failure, power outages and human error. Funders include Active Impact Investments and Collaborative Fund.
- Corporate partners. Early users include fast food giants McDonald’s and Burger King, convenience store chain 7-Eleven and Wyndham Hotels.
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Dealflow overflow. Other investment news crossing our desks:
- Bangalore-based Apna secures $12.5 million for its recruitment and social platform supporting India’s gig workers.
- Living Cities invests $2 million in Advance, Mission Driven Finance’s San Diego-focused fund for small businesses, social enterprises and nonprofits.
- Singapore’s Her Capital backs Hong Kong-based media startup Neufast as the first of its women-focused investments.
- Dandelion Energy clinches $30 million for home-based geothermal energy systems.
- Vector Innovation Fund is looking to back advanced health technologies that will curb future pandemic impacts.
Agents of Impact: Follow the Talent
Michael Herskovich is named global head of stewardship at BNP Paribas Asset Management… Prime Coalition is hiring a director of impact in Cambridge and a partnerships associate in San Francisco… UN Women is hiring a strategic partnership specialist in New York… Google is accepting grant applications from Black tech startup founders in Europe… Tideline’s Ben Thornley hosts “Climate Investing with True Impact” with Nuveen’s Allison Spector, Prime Impact Fund’s Amy Duffuor, Brookfield Asset Management’s Natalie Adomait and Rede Partners’ Jeremy Smith, Tuesday, March 9.
Thank you for your impact.
– Mar. 4, 2021