The Brief’s Big 7: Rise Fund recap, Techstars’ risk strategy, microcredit in the U.S., racial equity in cannabis, Grupo Bimbo’s agent of impact



TGIF, Agent of Impact!

Featured: The Brief’s Big 7

1. The Rise Fund – and impact investing – take stock of the damage. Managers of TPG Growth’s $2 billion Rise Fund fanned out to limited partners, prospects and influencers to contain the fallout from co-founder and former CEO Bill McGlashan’s indictment in the Varsity Blues college-admissions scandal. Leaders of the broader impact investing industry scrambled to wring lessons from the debacle. “How have our field’s media platforms, conference curators, and community leaders (such as myself…) let us down with our ‘big tent’ vision and less than critical acceptance of all who come to claim the banner of impact?” challenged Jed Emerson. Blue Haven Initiative’s Lauren Cochran acknowledged she had been put off by the swaggering tone of The Rise Fund’s launch in 2016, but said McGlashan’s ethical issues do “not mean impact investing is any less worthy an effort. On the contrary, it reveals an even greater need for the kind of societal change that impact investing hopes to accelerate.” Trevor Neilson, co-founder of i(x) investments, pointed to the danger that the backlash would undermine efforts to bring “huge pools of capital into the space — capital that we desperately need if we are going to confront the greatest threats humanity has ever seen.” The Global Impact Investing Network’s Amit Bouri said the episode represents impact investing’s coming of age. “We as a community have to be able to respond to things that don’t go properly, because inevitably that will happen.” The fallout.

2. Techstars spots startup opportunities in mitigating risks. The tech accelerator network, which has helped nearly 1,600 ventures raise more than $6 billion, is recruiting startups boosting access to basic services, increased diversity and inclusion, decreased poverty and inequality, and solutions to climate change, clean energy and environmental sustainability. The growing corporate interest in managing global social and environmental risks “represents both an impact opportunity and a market opportunity” for new ventures, says Techstars Impact’s Zoe Schlag. Techstars Impact, based in Austin, Tex., and Techstars Sustainability in Boulder, Colo., are recruiting their second cohorts of startups. Find out more.

3. Agent of Impact: Grupo Bimbo’s Tania Dib. As corporate treasurer for the Mexico City-based global bakery giant (Sara Lee, Oroweat and Entenmann’s are some of its many brands) Dib is responsible for investments from the employee pension fund. Bimbo’s corporate commitment to sustainability made impact investing a natural extension, as does the match between long-term investments and long-term pension liabilities. Even so, it took seven years for Dib to assemble the pieces for Bimbo’s first impact investment. Bimbo is anchoring the Latin America Impact Fund, a fund of funds managed by Sonen Capital and Mexican private-equity manager Fondo de Fondos. “This type of investment is still not well developed and is new to the environment, it is difficult to bring it to the table,” Dib told ImpactAlpha. Bimbo has committed 10% of the fund’s total of between $75 and $150 million. “Impact will and should be relevant in the minds of portfolio managers and institutional investors globally. It must,” she says. Investing in more traditional assets or portfolios are considered to be less risky and more familiar. “I think this is a paradigm that we need to break. It took us seven years.” Follow ImpactAlpha on Instagram.

4. Deals of the week. Stay on top of the dealflow all week long on ImpactAlpha.com. Deals that stood out:

  • Dealing in debt. CNote fund aims to boost lending to women business owners… NESsT raises $3 million toward an impact loan fund for Latin America.
  • Investment partnerships. Kresge seeds two Opportunity Zone funds, with impact strings attached… New York City partnership pledges $30 million to under-represented tech founders.
  • Better jobs. Whispr raises funds for an app for deskless workers… Professional women’s community Fairygodboss raises $10 million… Singapore’s CXA Group secures $25 million to make health benefits affordable.

5. The Hood Incubator’s Lanese Martin on racial equity in the legal cannabis trade. As marijuana legalization has spread across the U.S., Martin took stock of the impact on communities that had borne the brunt of the War on Drugs. In California, she says, “there was a new conversation about community reinvestment, equity, the relationship between legalization, prohibition and the drug war.” Martin and her business partners launched The Hood Incubator in Oakland in 2017 to train minority entrepreneurs as cannabis goes mainstream. The incubator has nurtured two classes of entrepreneurs and is considering launching, or helping others launch, an investment fund. “What folks need more than anything right now is access to capital,” says Martin. “A lot of the black businesses just aren’t seeing that, even with access to permits and licenses.” Read the Q&A.

6. Grameen studies the impact of microcredit on low-income women – in New Jersey. Nobel Laureate Muhammad Yunus’ Grameen Bank launched in Bangladesh in 1983 with a pioneering model for alleviating poverty: microlending. The bank’s U.S. affiliate, Grameen America, has disbursed more than $1 billion in short-term loans to 113,000 women in 14 U.S. cities since 2008. Now, Grameen America is setting out to prove its impact by tracking the progress of nearly 1,500 women in 300 loan groups in Union City, N.J. An early finding: 78% of borrowers obtained a credit score after a year, compared to 56% in a control group. “The formal capital system would assume them credit unworthy, but they really are some of the most credit worthy members of society,” Grameen America’s Andrea Jung tells ImpactAlpha. Grameen America has put its first, $11.5 million, investment fund to work and is raising a second. “Income inequality, particularly as it relates to women not having access to capital, is as exaggerated here as many other parts of the world,” Jung says. Dig in.

7. Gender-balanced investment firms outperform mostly male firms, and mostly female firms. Too few women in investment decision-making hurts private-equity and venture-capital returns, but so does too few men. Venture capital firms with between 30% and 70% women outperform both mostly male and mostly female firms, according to the International Finance Corp. Of course, few firms are faced with having too many women. The IFC report recommends that asset owners emphasize gender diversity in their due diligence on fund managers, and that managers do the same in their portfolio investments. Venture capital and private equity firms should redouble efforts to retain junior female employees, who can eventually fill top leadership positions. Get gender smarter.

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