The Brief | December 5, 2019

The Brief: Tipping Point fund, KKR’s wastewater strategy, Circulate’s Asia oceans fund, real estate retrofits in Toronto

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Funding the market infrastructure for impact investing’s ‘tipping point.’ A handful of funders have ponied up most of the capital spent to date on the ‘public goods’ required for a robust impact investing marketplace. To fulfill its potential to shape a more inclusive and sustainable economy, impact investing needs broader support for shared metrics and management systems, policy advocacy and other common infrastructure. This week, nine private and corporate foundations and family offices launched the Tipping Point Fund, committing $12.5 million in grant capital to underpin the growth of the market. The fund will be managed by the U.S. Impact Investing Alliance. Tipping Point Fund’s first request for proposal is expected later this month, seeking projects focused on public engagement and policy for impact investing in the context of the 2020 U.S. election.

The Tipping Point Fund is an explicit effort to safeguard the impact in impact investing and “shape the rules of the game,” said Darren Walker of the Ford Foundation, which supports the Alliance. Omidyar Network’s Mike Kubzansky said the growing embrace of “stakeholder capitalism” makes all the more crucial the effective practice of impact investing. “The social purpose of business is finally up for discussion, opening the way for impact investors to play a leading role,” he said. Joining the collaborative as well are Blue Haven Initiative, Rockefeller Brothers Fund and the Packard, MacArthur, Surdna, Rockefeller and Visa foundations. Notably absent from the list of Tipping Point Fund backers are legacy finance firms now launching impact investing funds and products, such as Goldman Sachs, Nuveen, Blackrock, KKR, TPG and Partners Group, among others. Kubzansky said he hoped others will join the effort and “pay their fair share to fund the rails upon which we all ride.” 

Keep reading, “Funding the market infrastructure for impact investing’s ‘tipping point’,” by Dennis Price on ImpactAlpha.

Sponsored by Tideline: Integrity through Verification

Game-changer for impact investing. More than 70 investment firms have signed onto the International Finance Corp.’s “Operating Principles for Impact Management.” The principles respond to the question Tideline hears most often from clients: “How, precisely, do we integrate impact into our investment decision-making processes?” The first eight principles call on investors to define impact objectives, monitor progress and consider the impact of exits. The real game-changer is the ninth principle, which requires independent verification and annual disclosure of signatories’ alignment with the principles, and solidifies the market’s response to the risks of “impact washing”. Tideline’s purpose-built methodology assesses firms’ impact management systems for compliance, quality and depth.

Dealflow: Follow the Money

KKR Global Impact dives into wastewater treatment to manage ‘nutrients’. Excessive nitrogen and phosphorus in waterways, largely from agricultural runoff, can lead to toxic algae blooms, which are harmful to humans and animals. KKR is using Global Impact to invest in nutrient monitoring, management and removal services for U.S. wastewater treatment facilities, in partnership with XPV Water Partners, a consulting and investment firm. The partners’ first two investments are Massachusetts-based Environmental Operating Solutions (EOSi), which makes non-hazardous chemicals to remove nutrients, and Winnipeg-based Nexom, a biological water treatment and filtration tech company. “We need better technology, more funding and broader-based implementation to tackle the problem,” KKR Global Impact’s Robert Antablin writes in a guest post on ImpactAlpha.

Circulate Capital reaches $106 million first close for Asia oceans fund. Circulate launched last year with a target of $150 million for recycling and other circular economy startups in Asia to curb ocean plastic pollution. It reached its first close with an anchor investment from PepsiCo, a loan guarantee from USAID, and a recent $15 million injection from oil company Chevron Phillips (see, “Catalyzing capital to prevent plastic waste: A conversation with Circulate Capital’s Rob Kaplan and USAID’s J.P. Gibbons”).

Toronto’s Atmospheric Fund backs real estate energy retrofits. The regional climate agency committed C$1 million ($760,000) to Windmill Development Group’s One Planet Living Fund, which will help the building sector finance retrofit initiatives to reduce carbon emissions. Approved projects must adhere to “rigorous standards of environmental responsibility and long-term sustainability.”

Agents of Impact: Follow the Talent

Quantified Ventures seeks a vice president of marketing and operations in Washington, DC… The Asian Infrastructure Investment Bank is hiring a senior environmental and social specialist in Beijing… Acumen is looking for a digital marketing manager in New York and a digital marketing associate in Nairobi… Impact Capital Managers invites first-year MBA students to apply for its inaugural Mosaic Fellowship.

Thank you for reading. 

– Dec. 5, 2019