The Brief | August 8, 2023

The Brief: The Liist: First-time impact fund managers, rebar recycling, green infrastructure in Africa, climate risk in insurance, Al Gore’s climate optimism

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Greetings, Agents of Impact! 

Featured: Impact Fund Managers

The Liist, August 2023: First-time fund managers bet on economic inclusion and shared prosperity. New fund managers hear a lot of no’s before corralling investors to a first or final close. Their hunger and hustle is reflected in data that suggests first-time fund managers outperform managers with longer track records. One differentiator: many new fund managers are homing in on overlooked markets, mispriced risks and underinvested opportunities. Havell Rodrigues and his team at New Majority Capital are training diverse entrepreneurs and helping them acquire existing small and mid-sized businesses. Their thesis: “Small business asset ownership will help close the wealth gap.” With Mirepa Investment Advisors in Ghana, Enyonam Kakane and Samuel Yeboah aim to spur small business and job growth, particularly for women (see, “Local and global investors show up to finance small businesses in Ghana’s missing middle“). From Los Angeles, Alex Mitchell’s Full Turn Capital is looking to back diverse-led startups supporting clean transportation and mobility with checks of up to $300,000. All are on this month’s Liist of impact fund managers currently raising capital. Also featured:

  • Renter wealth. Long-time housing and community investment nonprofit Enterprise Community Partners is in the market with a fund to acquire and preserve affordable housing – and share a portion of profits with long-term renters when properties are refinanced or sold. Enterprise has raised nearly two-thirds of its $100 million target; investors include the Ford and Robert Wood Johnson foundations and Arnold Ventures along with banks, wealthy families and Enterprise itself.
  • Less is more. The Yield Lab is in the market with a new fund based in Singapore to support Asia Pacific tech entrepreneurs addressing agriculture, aquaculture and food. The fund, targeted at $50 million, seeks to capitalize on technology “that facilitates wealth-creation and improved land management in order to produce more with a lower ecological footprint.” The Yield Lab Asia Pacific has invested in 10 startups, including India-based Credit AI’s alternative credit scoring methods for smallholder farmers and Singapore-based insect farming venture Protenga.
  • Keep reading, “The Liist: First-time fund managers bet on economic inclusion and shared prosperity,” by Jessica Pothering on ImpactAlpha. Scan snapshots of dozens of innovative and impactful funds and managers in past editions of the Liist.
  • Liisting Agents. Do you know an emerging or other impact fund manager currently raising capital? Drop us an email or complete this short form.

Dealflow: Low-Carbon Transition

Hybar snags $700 million in debt and equity to recycle steel in Arkansas. Electric vehicle, battery and chip factories are rising in the US South and Midwest. Hybar’s planned mill in Osceola, Ark., could help build more of them. Hybar turns scrap metal into rebar, a key construction material, using on-site solar power. The company says its process is more water- and energy-efficient than traditional rebar mills. Its funding round includes $330 million in climate bonds certified by the Climate Bonds Initiative and issued by the Arkansas Development Finance Authority. The remainder is an equity investment led by TPG Rise Climate and Miami-based Global Principal Partners, an investment and project development firm set up by steel veteran David Stickler, who founded Hybar. Stickler ran Big River Steel, a LEED-certified plant near Osceola now owned by US Steel. Hybar will offer “competitively priced rebar that is also the greenest rebar in the market,” Stickler said

  • Green jobs. Hybar expects the plant to turn out 630,000 tons of rebar a year and employ more than 150 workers. It says its rebar will primarily be used in large infrastructure projects, including those supported by federal infrastructure and Inflation Reduction Act incentives. Shifting to low-carbon steel could increase jobs supported by steelmaking in the nearby Ohio Valley by up to 43% by 2031, according to a recent study.
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Acre Impact Capital secures €40 million to spur green infrastructure development in Africa. Africa faces an annual infrastructure financing gap of at least $100 billion. “Only 6% of all infrastructure financing comes from the private sector,” which is low compared to other regions, Acre Impact Capital’s Hussein Sefian told ImpactAlpha. “Everything else comes from governments or donors.” Acre raised capital from the European Investment Bank and several South African banks for its Export Finance Fund, which uses international government guarantees to leverage commercial capital for African infrastructure developments. The fund aims to help close funding shortfalls for renewable power, health, food, water and green transport projects.

  • Export finance. Acre’s model leans on an under-tapped source of infrastructure finance: export credit facilities. ECAs, often from the Global North, are government-owned institutions that facilitate exports to emerging and frontier markets. They’re often willing to provide credit-risk guarantees that cover up to 85% of an infrastructure project’s costs. Acre aims to provide the capital for the remaining commercial tranche. “We can look at transactions in jurisdictions that others would find more challenging,” Sefian said.
  • Catalytic capital. Acre will cut checks of $15 to $20 million, unlocking guarantees and bank financing for projects of up to $150 million. The European Investment Bank said, “By providing specialist funding for this tranche, the Fund will unlock transactions and could mobilize $5.6 of private sector capital for each dollar invested.” Acre itself received catalytic capital from Rockefeller Foundation and GuarantCo to launch the fund, and from USAID to integrate 2X gender-focused criteria into its investment process.
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Dealflow overflow. Other news crossing our desks:

  • Colorado-based Divirod raised a $3.6 million bridge round for its flood and water risk management software. (Divirod)
  • Nigeria’s Remedial Health secured $12 million in Series A financing to help local pharmacies digitize their operations. (WeeTracker)
  • Waaree Energies clinched 10 billion rupees ($120.1 million) to manufacture solar tech components, including ingots, wafers, cells and modules. (YourStory)
  • Newlight Technologies, which uses microbes to convert greenhouse gasses into a plastic alternative, raised $125 million in a round led by Temasek-owned GenZero. (Finsmes)

Six Short Signals: What We’re Reading

🗺️ Navigating impact investing. To kick off a series on impact investing, Deloitte lays out the fundamental difference between ESG and impact, recognized standards, and emerging regulations in Europe. (Deloitte)

🛵 Gig workers fight back. As more on-call workers fall under the purview of algorithms, workers are being pitted against each other. Jakarta’s motorbike taxi drivers provide a playbook for resistance and new ways for workers to build collective power. (MIT Technology Review)

🟰 Equity pays. The list of metro areas where Black residents are thriving most – such as Huntsville, Ala.; Atlanta, Augusta, Ga.; Killeen-Temple, Texas; and Washington, DC – correlates to more equitable representation of Black-owned businesses. (Brookings Institution)

🌾 Financing food. Agriculture and food systems include high-emission and climate-vulnerable sectors, yet attract little finance for climate solutions. An analysis by sector, geography and financial instrument breaks down climate finance going to agriculture, forest and aquaculture systems. (Climate Policy Initiative)

⚠️ Climate risk in insurance markets. The cost of the 357 separate billion-dollar weather disasters since 1980, from severe storms to heat waves to wildfires, has reached more than $2.5 trillion. An analysis reveals how 15 insurance companies report their climate risk data. (Ceres)

☀️ Al Gore is optimistic. “I’m convinced we are going to solve the climate crisis,” the former Vice President says in a new Ted Talk, in which he lays out a vision to accelerate climate action. “If you doubt that we as human beings have the will to act, please always remember that the will to act is itself a renewable resource.” (TED)

Agents of Impact: Follow the Talent

Hiro Mizuno, former chief investment officer of Japan’s Government Pension Investment Fund, is named special advisor to the CEO of MSCI (see, “Hiro’s Journey”)… Tesla’s chief accounting officer Vaibhav Taneja will add CFO duties as Zach Kirkhorn steps down after 13 years at the EV maker… Damien Wilson, ex- of WD Advisors, joins Reinvestment Fund as a senior director for the HBCU Brilliance Fund. 

Eric Horvath steps down as director of impact investments at Common Future… The Nature Conservancy has openings for a director of stewardship in New Haven, Conn., and an associate director for its California water program… Opportunity Finance Network is hiring a senior investment officer in Washington, DC for its climate and green lending programs. 

King Philanthropies is looking for a senior associate in San Francisco… Tent Partnership for Refugees is hiring a deputy director of strategic initiatives in New York… Think tank New Philanthropy Capital is on the hunt for an impact investing senior consultant in the UK… Dutch development bank FMO seeks a senior sustainable finance officer in The Hague.

Thank you for your impact.

– Aug. 8, 2023