Greetings, ImpactAlpha readers!
ImpactAlpha joined impact investors this week at the GIIN Investor Forum in Paris and the Gender-Smart Investing Summit in London for a full helping of briefings and breakouts. See below for a few highlights and we’ll catch up next week. Happy weekend to all.
Featured: The Brief’s Big 9
1. Investors double the capital committed to gender-smarter vehicles. Separate tallies of public and private assets in gender-lens investing strategies suggest that investors have doubled their commitments to investment vehicles that are betting on women. Veris Wealth Partners reported that nearly three-dozen publicly traded gender-lens securities now hold $2.4 billion. We also learned from Project Sage that 87 private funds investing in women now manage $2.25 billion. Put together, the $4.65 billion in gender-lens assets identified in the two annual tallies was more than double last year’s $2.2 billion total. “This is an underserved market segment. There is deal flow. There are quality opportunities. And there is investor appetite,” Suzanne Biegel, co-host of the Gender-Smart Investment Summit, told ImpactAlpha. See clearly.
- Going deeper. Despite the uptick in gender-lens committed assets, “too many of these investors are applying gender-lens strategies that are too narrow or shallow, leaving potential impact and financial gains on the table,” MEDA’s Carolyn Burns and Devon Krainer write in the latest post in ImpactAlpha’s Beyond Aid series. MEDA’s Gender Equality Mainstreaming framework helps investors and companies unlock unrealized value in achieving gender-parity. More.
2. Agent of Impact: Vicki Saunders. SheEO’s Vicki Saunders has a radical idea to boost the flow of capital to women entrepreneurs: Collect $1,100 apiece from 500 women donors and lend it out to women-owned, women-led ventures at 0% interest, with no collateral. “We don’t want to just create a female version of the male economic model,” Saunders said at the Gender-Smart Investing Summit in London. “This is part of the new world that women are building.” Toronto-based SheEO started in Canada and has now launched programs in the U.S., Australia and New Zealand as well. The donors for each cohort vote on which founders make it into the pool, and then the entrepreneurs divvy up the funds between themselves. Revenue growth in SheEO’s portfolio of dozens of ventures has averaged in the triple digits annually. Saunders rejects the winners-take-all mentality of much of the financial system. “We are not here to win,” she says. “We are here to transform.” ImpactAlpha on Instagram.
3. ImpactAlpha’s Agents of Impact videos from the GIIN Investor Forum. KPMG’s Tania Carnegie, who works with private equity firms launching impact investment strategies, says firms are increasingly seeking “impact assurance” to demonstrate the authenticity of their impact investments. Andrea Armeni of Transform Finance says he’s excited about the increased focus on the “how” of impact investing, such as municipal finance and alternative forms of ownership and governance. Check out ImpactAlpha other interviews from Paris, including MacArthur Foundation’s Debra Schwartz and Neil Duren of Gramercy Hill Partners (Disclosure: Gramercy Hill, along with the Rise Fund, sponsored ImpactAlpha’s dinner and reception at the GIIN forum.)
4. Impact investments remain a tiny fraction of total “sustainable” assets in the U.S. Under the broadest definition, sustainable assets in the U.S. reached $12 trillion, a 38% increase from two years ago, according to the biennial tally from the U.S. Forum for Sustainable and Responsible Investment, or US SIF. That means a quarter of the $46 trillion in total U.S. assets under management now take into account environmental, social or governance, or ESG, factors, either when selecting investments or through shareholder resolutions. Very little of that total is in proactive impact investments, however. Institutional investors and money managers identified just $84 billion in impact investments. More from the report.
5. New leadership is taking community development financing to the next level. Community investment assets, driven by growth in credit unions, grew 50% to $185 billion, according to the same tally by US SIF. Consulting firm Next Street interviewed leaders from the kind of community development finance institutions, or CDFIs, moving some of that money. Among the takeaways: “The next generation of leaders have arrived,” Next Street’s Tim Ferguson writes in a guest post on ImpactAlpha. “They are acutely aware that they need to evolve if they are going to be successful in a landscape where much of their historical funding, particularly from banks and government, is at risk.” Next-gen leaders.
6. The Hub is a hub of impact investing. ImpactAlpha has been highlighting local entrepreneurship ecosystems and inclusive economic revival across the U.S. Our latest piece turns the spotlight on Boston, where local leaders like the Boston Impact Initiative, BlueHub Capital, Sunwealth, and Boston’s Ujima Project are putting communities at the center of investment decision-making. Place-based impact investing is breaking out all over. Philadelphia is leveraging local institutions and homegrown diversity to jumpstart inclusive growth. Austin is turning obsessions for tech, culture and local business into a model for social innovation. In North Carolina, philanthropy is expanding opportunity in entrepreneurship by investing in the ecosystems that invest in entrepreneurs. The Boston impact party.
- Re-up: Impact investors rediscover the power of ‘place’.
7. Deals of the week. Drink from the deal firehose all week long on ImpactAlpha.com. A few that stood out:
- Spotlight: Africa. GSMA launches digital inclusion fund for Africa… Novastar raises $72.5 million to expand startup investing to West Africa… NEoT Offgrid Africa backs Rensource Energy’s micro-utility Sabon Gari Energy.
- Financial inclusion. MicroVest closes $20 million credit facility with Metlife to boost financial inclusion… Jay Z-backed Ethos raises $35 million to simplify access to life insurance.
- Future of work. Salesforce Ventures, Lumina Foundation and Robin Hood partner for workforce development… Southern New Hampshire University and LRNG merge to support pathways to work… SEAF women’s fund backs education company Dream Viet Education.
- Financing fish and food. Geltor raises $18.2 million for animal-free collagen… Aqua-Spark backs CageEye to improve fish farm management.
8. Putting impact at the center of public and private market decisions. In a guest post on ImpactAlpha, Amit Bhatia of the Global Steering Group for Impact Investment calls for the drafting of an Impact Act, to make reporting of impact mandatory for all public and private organizations. “If Capitalism 2.0 is to be more humane, conscientious and inclusive than its previous iteration,” writes Bhatia, “social impact must shift from a fringe consideration to the center of business, government and investment decisions.” Growing the impact movement.
9. A podcast probes the business of ImpactAlpha itself. ImpactAlpha’s six-month-old paid subscription model has aligned the publication directly with its audience and set it up for organic growth, says ImpactAlpha’s CEO David Bank. The latest episode of the Returns on Investment podcast tuned into the business of building a mission-driven media publication. “The more and the better stories we write, the better the content, the more value we provide.” Bank says. “More people come to the site and sign up. And some of them actually give us their credit cards and subscribe.” Conversely, he says, “the better the business, the better editorial we can produce.” ImpactAlpha’s own business model.
— November 2, 2018.