Greetings, Agent of Impact. Happy International Women’s Day!
The talent mobilization is on. In small startups and major enterprises, business schools and policy shops, Main Street and Wall Street, the people want impact. Increasingly, the best talent in business and finance identify themselves as agents of impact. “These are people, in some cases with deep experience in traditional finance, who are willing to tackle the hard work of forging a new way in a complex new form of investing rather than choosing the conventional route,” the Global Impact Investing Network’s Amit Bouri wrote in ImpactAlpha.
Bouri kicked off the week with four ways the financial industry can capitalize on the enthusiasm. Value experience. Build a pipeline. Upskill professionals. And embed impact in investment certifications. What are your ideas for seizing the talent opportunity? We’re extending the deadline for short blurbs (a few paragraphs) or full posts (600 to 800 words) until Monday, Mar. 11 at 10am ET. Thanks to Agents of Impact Rehana Nathoo, Dave Chen, Lauren Cochran, Aunnie Patton Power, Sharadiya Dasgupta, Joe Milam, Caroline Bressan and Brian Walsh for early contributions. Send your thoughts to [email protected] or jump on the subscriber-only Slack channel.
– Dennis Price, editorial director
Featured: The Brief’s Big 7
1. Women are leading the way – in about 30% of ImpactAlpha’s dealflow. Just in time for International Women’s Day, we looked back through a year of ImpactAlpha’s dealflow to find out just how many of the funded ventures we covered are women-led. (Most of the ventures had not called out the gender makeup of their leadership teams – we had to dig.) The results: At least 97, or 28%, of the 350 ventures have at least one female founder, CEO or managing director. That’s not 50%, but it’s about double the ratio of mainstream VC deals. After the U.S., Africa had the highest number of women-led teams in our deals dataset. By sector, financial services, education and workforce development have the largest numbers of female founders and leaders. Of note: Many of the startups working to democratize impact investing – including Ellevest, CNote and COIN – are women-led. Getting sh*t done.
2. An investment strategy to accelerate China’s low-carbon transition. First, invest in “platform” companies to open distribution channels in China for cleantech products and services. Next: Back western firms with proven technologies and plug them in. That’s the investment strategy being executed by the Beijing-based U.S.-China Green Fund. A first fund of $550 million has notched more than a dozen China-based investments; the firm is now raising a second, yuan-denominated fund of up to $1 billion. Launched in 2015 with high-level political support in both countries, the fund is opening a Chicago office and building a U.S. pipeline of companies with technologies driving sustainable agriculture, clean water, renewable energy, waste reduction and green building materials. Low-carbon platform.
3. A lesson in JP Morgan’s split from private prison lending. The social risk of human rights abuses has become a material risk for investors. Those risks led the largest U.S. bank this week to step away from underwriting loans to CoreCivic Inc and GEO Group Inc, the two major U.S. private prison operators. Activists raised the profile of potential human rights abuses inside immigrant detention centers run by the companies with staged protests and petitions. Activist investors, representing 300 global institutional investors managing more than $400 billion in assets, pressured the banks. Ongoing lending to the prison operators, “may expose the bank to reputational risk and result in its losing clients who are opposed to the current immigrant policy and/or have concerns with private prisons more generally,” wrote the Interfaith Center on Corporate Responsibility. Bottom up… and top down.
- Other lenders. Banks including Wells Fargo, Bank of America, Citizens Bank, US Bancorp and BNP Paribas can expect to face pressure over prison financing as well.
4. Agent of Impact: Patricia Farrar-Rivas, Veris Wealth Partners. Veris Wealth Partners has a reputation for leadership on gender lens investing. Lately, Veris’ CEO Patricia Farrar-Rivas has been thinking about how to go further, much further. ImpactAlpha caught up with Farrar-Rivas this week at Confluence Philanthropy’s annual practitioner’s gathering in New York. On her mind: racial equity and, specifically, reparations for slavery and genocide. “African Americans and indigenous communities don’t benefit from the wealth that their ancestors created and died for,” she said. She is exploring how impact investments and philanthropic capital can be used to facilitate reparations. She admits her thinking is nascent, but suggests housing may provide a route. “Home ownership is proven to be one of the greatest wealth builders,” she says. The New York Times’ David Brooks is rethinking the issue as well. On Farrar-Rivas’ reading list: Michelle Alexander’s The New Jim Crow, about policies that have deliberately created segregation and disenfranchisement; Andrea Stuart’s Sugar in the Blood, about how the West Indian sugar cane industry shaped slavery in the Americas; and Daniel Kahneman’s Thinking Fast and Slow, about how people make decisions. Follow ImpactAlpha on Instagram.
- Follow the talent with ImpactAlpha’s weekly report on career moves, job openings, events and opportunities.
5. Deals of the week. Stay on top of the dealflow all week long on ImpactAlpha.com. Deals that stood out:
- Cleantech and climate finance. Jupiter Intelligence raises $23 million for climate risk analytics… India’s Ola launches electric vehicle business with $56 million in funding… Baseload Capital secures $12.5 million from Breakthrough Energy Ventures… Remix secures $15 million to improve city transit.
- Food and farmer finance. Jai Kisan raises seed funds to incentivize farmer financing in India… Superfood company Kuli Kuli raises $5 million from corporate and impact investors.
- Inclusive fintech. FutureFuel.io raises $11.2 million to help employees tackle student debt… Quona Capital leads $12.8 million equity round for India small business lender. SMEcorner… Chile’s Destacame raises $3 million to boost consumer financial access.
- SDG investing. Summa Equity closes $690 million fund targeting the Global Goals and megatrends… John Hancock rolls out COIN, a “conscious” investment account for everyday investors.
6. A half-dozen ways to accelerate capital for climate action. Since 2015, the 35 projects nurtured by Global Innovation Lab for Climate Finance have mobilized $1.4 billion in additional capital. This year’s new selections include Blockchain Climate Risk Crop Insurance, which would use smart contracts to provide farmers in west Africa with automatic payouts when extreme weather events damage crops; Breathe Better Bonds, which would leverage credit enhancements from the International Finance Corp. to help cities in southeast Asia pay for air-pollution reducing projects; and Solar Securitization for Rwanda, in which the Development Bank of Rwanda would securitize solar project receivables to free up capital for further solar deployment. Wonk out.
7. Catalytic capital for the creative economy. Theaters face cash shortfalls for production costs to put on a show in advance of grants and ticket sales. Conventional banks often perceive small non-profits as too risky and consider loans to them too costly. The Arts & Culture Loan Fund, created by the MacArthur Foundation more than a decade ago, has helped fill the gap for three dozen small- to midsize Chicago organizations with budgets from $250,000 to $5 million. The fund provides working capital loans, support to improve financial management skills and help in building credit histories. Write the MacArthur Foundation’s Cate Fox and Allison Clark in a guest post on ImpactAlpha, “What we learned is that in addition to meeting tactical goals, it is also a strategic investment in building resiliency for arts organization.” Crowd in capital.
— March 8, 2019.