Greetings, ImpactAlpha readers!
Featured: The Impact Alpha
The Impact Delta: Change is good for investors focused on environmental and social performance. An article of faith among impact is that companies that effectively manage their environmental, social and especially governance factors are good bets to be lower-risk, higher-performers, at least in the long term. The notion is that management attention to such “ESG” factors is a proxy for good management more generally. Inevitably, the all-knowing market is pricing that advantage into a firm’s valuation, in both public and private markets. Which means it’s getting tougher to get good ESG performance on the cheap.
That means impact investors may need to look at “distance traveled” as well as absolute performance or outputs. Impact alpha, meet impact delta. In his latest column, ImpactAlpha editor David Bank takes a look at how investors can capture the impact premium. It’s not too late to take advantage of undervalued environmental and social impact. Cornerstone Capital Group’s Erika Karp said in an email exchange. “We are WAY too early in the movement to say that the predictive insight attainable through ESG analysis is already arbitraged away. It’s not.”
Read “The Impact Delta: Change is good for investors focused on environmental and social performance,” in The Impact Alpha, editor David Bank’s weekly column.
Featured Event: Confluence Philanthropy’s Advisors Forum,June 19 & 20, New York City
Taking mission-aligned investing to scale. We like the themes of Confluence Philanthropy’s Advisors Forum in June in New York. The philanthropic impact investors network will convene investment advisors, asset managers and endowment fiduciaries to explore strategies for investing in inclusion, achieving alpha through sustainability and removing barriers to dealflow in impact investing. Register here.
Signals: Ahead of the Curve
A retirement plan for the gig economy? No retirement savings. No pension. Not enough cash to cover a $400 emergency. That’s the well-known financial plight of almost half of American families. Fintech startup Blueprint Income’s simplified annuities — insurance contracts that offer a steady stream of income to retirees — can appeal to a new generation of freelancers, independent contractors and gig workers, as well as salaried employees concerned about retirement. “People have a desire for steady income security,” says Blueprint’s Matt Carey.
Annuities offer stable but usually lower returns than higher-risk contribution plans. They have the reputation of being expensive, complicated and inflexible, and often require a broker and a large lump-sum cash buy in. Blueprint allows online signup, a cheaper buy in and continuing contributions.
- Buy in… After a buy-in price of $5,000, customers can contribute as little as $100 per month and stop paying in at any time. A customer cannot withdraw any money from her account.
- Pay out… The buyer receives a payment every month—the amount depends on how much money has been accumulated—after retirement.
- Cost questions… The company gets paid by the insurers it works with, and those costs are reflected in the payout customers receive. The team didn’t disclose Blueprint’s commission rates or any of the fees collected by the insurers, but says Blueprint’s online platform allows it to charge less than traditional insurance brokers.
Blueprint works with 15 insurers and says it has placed tens of millions in insurance premiums from customers’ in their early 30s up to age 70. Since launching in March, Blueprint has raised $2.75 million from Green Visor Capital, NextView Ventures, and Jean Chatzky, the personal finance editor of The Today Show.
Agents of Impact: Follow the Talent
LAVAN, the Jewish community of impact investors, is looking for a new executive director in New York City… Social business accelerator Agora Partnerships is on the hunt for its first-ever managing director for Latin America in Mexico City or Bogotá… Echoing Green released the finalists for the next class of Echoing Green Fellows; they’re from the U.S., Kenya, Brazil, India, Uganda, Chile, Nepal, Nigeria and Swaziland and Tanzania… Frontier Innovators, an initiative of the Australian government’s innovationXchange, and run by SecondMuse, selected 15 innovative businesses (from 700 applicants) in the Asia-Pacific in sectors aligned with the Sustainable Development Goals.
Dealflow: Follow the Money
Hewlett Foundation aims to activate retail banks for climate action. As part of its $600 million, five-year commitment to addressing climate change, the William and Flora Hewlett Foundation is looking for models and concepts to accelerate environmentally sustainable consumer banking. Read more.
Wunder Capital raises $112 million to scale US commercial solar financing. The solar financing company’s about $11 million Series B equity financing was led by Cyrus Capital Partners, and included Techstars Ventures, which led the firm’s Series A. Cyrus also provided $100 million in debt to Wunder. Read on.
Omnivore backs AgNext to improve data used in agriculture. AgNext, based in Chandigarh in northern India, collects crop data, which customers use to make operational and sourcing decisions. Go deeper.
Gray Matters Capital launches accelerator for Indian edtech startups. The aim is to accelerate companies using mobile apps to educate, build skills, help users earn a living and bridge gender gaps in education and workforce participation. Learn more.