Greetings, Agents of Impact!
Featured: Muni Impact
Cincinnati ‘jobs bond’ aims to fuel manufacturing boom in the Midwest. If you build it they will come. An innovative bond issuance will help “The Port” in Cincinnati acquire and remediate industrial property to attract advanced manufacturers and private investment to the city. The Port of Greater Cincinnati Development Authority, announced plans for a $100 million “jobs bond” at this month’s rally for the Milken Institute’s 10,000 Communities Initiative, Aces & Archers’ Rachel Reilly, a Milken advisor, reports for ImpactAlpha. Once the sites are acquired, The Port can tap federal funding to ready them for manufacturers growing their operations in Cincinnati. “We need to quickly reposition over 150 acres of former industrial property if Cincinnati hopes to be competitive in attracting US manufacturers to our city,” says The Port’s Laura Brunner (see, “How ‘The Port’ is drawing private investors to redress Cincinnati’s racial wealth gap”). The fundraise will mix philanthropic program-related investments with tax-increment financing, which has been used to promote redevelopment of blighted areas. The Port is stepping in, Brunner says, “to do the hard work and ensure that our region is ready to capture future growth in the domestic manufacturing sector in a way that drives equitable and inclusive growth locally.”
- Supply and demand. The Inflation Reduction Act and other federal funding has kicked off a US manufacturing revival. Manufacturers have struggled to find appropriate sites in Cincinnati, costing the region high-quality jobs for local workers. “The demand is clearly there; we just need to work on the supply,” says Eric Letsinger of Quantified Ventures, which is helping The Port structure the new bond and bring it to impact investors. Once the sites are remediated and available, adds Letsinger, “Cincinnati will be better positioned to leverage new federal programs and tax incentives meant to grow US manufacturing.”
- Project development. “Muni bond structures can provide communities with a competitive edge when competing for federal resources and private investment incentivized by the tax credits enacted in the IRA,” says Milken Institute’s Dan Carol (listen to the podcast, “Connecting disadvantaged communities with critical project development financing”).
- Keep reading, “Cincinnati ‘jobs bond’ to help bring manufacturing back to the Midwest,” by Rachel Reilly on ImpactAlpha.
Dealflow: Agrifood Investing
Omnivore raises $150 million for its third India agrifood tech fund. The Mumbai-based impact investor surpassed a $130 million target to invest in agrifood tech startups in India (see, “The Liist”). The firm is embedding a climate lens, which aligns with VC investment trends in India. “We see increasing climate salience in everything that we’re doing,” Omnivore’s Mark Kahn told ImpactAlpha. The VC downturn has generated more opportunity for early-stage investors like Omnivore, he said. “Valuations have come down sharply so that makes us more excited.” Investors in Omnivore’s third fund include Germany’s KfW, the Netherlands’ FMO and Dutch Good Growth Fund, the International Finance Corp. and the Gates Foundation.
- Climate finance. “The greatest risk and opportunity for Indian agriculture are the adverse effects of climate change,” Kahn said. In December, it invested in Varaha, which links smallholder farmers to carbon markets for sustainable agroforestry and mangrove conservation. Omnivore scored a partial exit from Ecozen, a Pune-based startup that makes clean energy-fueled products to help farmers weather drought, heatwaves and other climate impacts.
- Read on.
BlueOrchard secures $100 million to back small enterprises in Latin America and the Caribbean. The Swiss impact investment firm, with Global Affairs Canada and IDB Invest, is launching a private debt fund aimed at the $100 billion financing gap for small businesses led by underserved groups in Latin America and the Caribbean. That includes “women entrepreneurs, Indigenous groups, Afro-descendants [and] migrants,” said IDB’s Gema Sacristan. The fund, which has a $200 million target, will provide technical assistance and financial products and services. The blended finance fund, classified as an EU “Article 9” fund for its sustainability objectives, secured commitments from public investors, family offices and pension funds. Check it out.
Dealflow overflow. Other news crossing our desks:
- Unshackled Ventures raised $35 million for its third fund to invest in immigrant-led businesses in the US. California’s Infrastructure and Economic Development Bank chipped in $4.1 million, the first investment from its Expanding Venture Capital Access initiative.
- Germany’s Bluu raised €16 million ($17.5 million) to get its lab-grown fish approved for consumers in Singapore, one of the few markets that has approved lab-grown meat alternatives. (TechCrunch)
- The African Development Bank is providing a $400,000 grant to Eswatini, one of the world’s poorest countries, to map out plans for an “eco-green mastercity” that would create 100,000 jobs. (AfDB)
- Milestones: Bayer made its first purchase of carbon removal credits from Novocarbo, a Hamburg-based producer of biochar. (Carbon Herald)
Impact Voices: Returns on Inclusion
Need for ‘skin in the game’ hampers diversity in fund management. It’s a standard but little scrutinized rule: those who want to raise an investment fund have to chip in, personally. The “general partner commitment,” typically 1% of a fund’s target, assures investors that managers have “skin in the game” and are committed to the fund’s success. “This is a solid expectation,” but can be prohibitive for managers of color, writes JaNay Queen Nazaire of research and advisory firm Blk Grvty, in a guest post for ImpactAlpha. “Your average person cannot come up with this level of capital to support fund development, and especially not your average person of color, who only has around $200,000 in net worth,” she says. (A 1% commitment for a $20 million fund, for example, comes to $200,000). General partner commitments, Queen Nazaire says, are among the “structures still in place that create almost insurmountable barriers to entry for people of color within the investment industry.”
- Known alternatives. Blk Grvty was recently acquired by Known Holdings to explore capital models and provide grants to fund managers of color. A $100,000 grant to Monique Woodard of Cake Ventures is helping her meet her GP commitment and cover operating expenses. “We will not increase wealth for people of color until we can increase the number of people in the investment industry directing capital to businesses owned by people of color,” Queen Nazaire writes. “We will not increase the number of people of color who are asset owners and managers until we can overcome the GP commitment barrier.”
- Keep reading, “Need for ‘skin in the game’ hampers diversity in fund management,” by Blk Grvty’s JaNay Queen Nazaire on ImpactAlpha.
Agents of Impact: Follow the Talent
Bhairvee Shavdia, ex- of HCAP Partners, joins SBJ Capital as managing director… Alexis Dishman, ex- of Michigan Women Forward, joins Community Reinvestment Fund as chief lending officer for small business… Social Finance seeks an impact investment associate director in Boston… Allianz Global Investors seeks an impact private credit student apprentice in Paris.
Caspian Impact Investments is on the hunt for an equity investments associate or senior associate in India… New Profit is accepting applications to its Economic Mobility Catalyze cohort… Bridgespan is hosting “What are intended impact and theory of change?” Tuesday, July 11… Aspen Community Strategies Group and the Reimagining Rural Assistance Network are co-hosting a webinar today at 3pm ET about the CHIPS and Science Act’s Recompete Pilot Program.
Thank you for your impact.
– June 29, 2023