The Brief | July 27, 2018

The Brief’s Big 7: Opportunity zone opportunity, impact investing World Cup, gender-smart investing, expanding entrepreneurship

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Greetings, ImpactAlpha readers!

Suddenly, we’re worrying about too much money flowing into low-income neighborhoods? The Investing in Opportunity Act, tucked into last year’s tax bill, created thousands of “opportunity zones” across the U.S. in which investments qualify for big tax breaks. The expected flood of capital will create new challenges for champions of community development. After decades of scarcity, what might abundant capital mean for economic inclusion?

If you’re feeling that FOMO, jump on ImpactAlpha’s Agents of Impact Call No. 3. LISC’s Maurice Jones, Beeck Center’s Lisa Green Hall, Economic Innovation Group’s Steve Glickman and other early movers will share strategies, structures and safeguards for seizing the opportunity zone opportunity. Join us Thursday, Aug. 9 at 1 pm ET / 10 am PT / 5 pm GMT. RSVP for The Call today.

Featured: The Brief’s Big 7

1. Who are the favorites in the World Cup of impact investing? Impact investing has become a global sport. Ace analyst Adam Spence, director of SVX at MaRS in Toronto, offered what he calls “an unscientific, imprecise, fan-styled, and mostly fact-free analysis” of the strongest teams. His take: Europe has the right ingredients to succeed in the group round. Latin America is vibrant and highly competitive, especially in Mexico, Brazil and Colombia. Asia-Pacific’s emerging powerhouses include South Korea, Japan and Australia – and here comes China. Centers of activity in Africa and the Middle East include Ghana and Nigeria, South Africa and Dubai. The U.S. tops the leaderboard, but “chaotic management challenges at the very top” threatens progress, Spence says. Canada, he says, “could be a world-changer.” The complete forecast.

2. The Impact Alpha: The gender-lens investing moment is here. If the Women’s March, the #MeToo movement and the growing awareness of inequities in access to capital raised the questions, gender-lens investing has become at least part of the answer. Financial advisors and wealth managers are paying attention, ImpactAlpha’s David Bank writes in his latest column. “If we are not getting it about what women want and what women need, we are going to see them walking out the door,” says Suzanne Biegel, co-producer of the first Gender-Smart Investing Summit in London in November. With French President Emmanuel Macron putting gender at the center of next year’s G7, development-finance institutions pledging to mobilize $3 billion for the “2X Challenge” and the World Bank’s $1 billion We-Fi project gearing up, you want to be in the room where it happens (h/t “Hamilton”). Get gender smart.

3. How cities can catch the rising wave of women’s entrepreneurship. The number of businesses started by women is growing fast. Dell’s Women Entrepreneur Cities Index, which tracks 50 top cities for women-owned businesses, is providing blueprints for how 10 cities could increase access to capital and technology and overcome cultural and political barriers that “continue to limit the success of women-owned businesses,” according to Dell’s Karen Quintos. Singapore, Austin, Mexico City and other cities are tapping the talent of women entrepreneurs. Find out how.

4. Bidders for Abraaj growth fund tout their impact bona fides. One of the remaining contenders to take over the $1 billion Abraaj Growth Market Health Fund is TPG Growth’s Rise Fund, the high-profile private-equity impact fund co-founded by rock star Bono and billionaire Jeff Skoll. The winning bidder will need the approval of limited partners, including the Bill & Melinda Gates Foundation, which made a $100 million program-related investment in the health fund. Abraaj is now in liquidation after accounting irregularities first flagged by the Gates Foundation and other health fund investors. No word yet on whether Bono, who has famously described impact investing as “a lot of bad deals done by good people,” includes the health fund in that characterization. Private-equity watch.

5. Deals of the week. Drink from the deal firehose all week long on A few that stood out:

6. Ross Baird: Increase the flow of capital to rural entrepreneurs. Economic revival in rural America requires more capital for small-town entrepreneurs. Village Capital’s Ross Baird told the U.S. House of Representatives’ Committee on Small Business that Congress can: Defer student loans for entrepreneurs who start businesses in economically distressed areas. Make sure rules for Opportunity Zones direct capital toward local entrepreneurs. Support flexible small-business financing structures that match repayment revenues. The plan.

7. America’s Pledge: Bottom-up climate solutions for America’s low-carbon future. Since President Trump announced he was pulling the U.S. out of the Paris climate agreement, hundreds of cities, states, businesses, universities, and others have stepped up to say, “We are still in.” Now, America’s Pledge is highlighting 10 immediate, non-federal emissions-reduction opportunities. Among them: Double down on renewable energy targets. Boost carbon sequestration in natural and working lands. Put a price on carbon at the state and regional level, even without federal action. The emerging low-carbon future.

— July 27, 2018.