The Liist | August 8, 2023

The Liist, August 2023: First-time fund managers bet on economic inclusion and shared prosperity

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, August 8 – Raising a new fund isn’t for the faint of heart. New fund managers hear a lot of no’s before corralling investors to a first or final close. 

That hunger and hustle is reflected in data that suggests first-time fund managers outperform managers with longer track records. 

One differentiator: Many new fund managers are homing in on overlooked markets, mispriced risks and underinvested opportunities. 

This month’s Liist of impact funds that are actively fundraising includes three emerging fund managers whose investment theses center around inclusive economies. Havell Rodrigues and his team at New Majority Capital are preserving the longevity of America’s successful small businesses while helping more women and people of color become business owners. Enyonam Kakane’s and Samuel Yeboah’s Mirepa Investment Advisors in Ghana aims to spur small business and job growth, particularly for women. Alex Mitchell’s Full Turn Capital in Los Angeles is looking to accelerate the green mobility transition in the US and Europe by investing early in diverse-led startups.

All are raising their first funds. All also have experience and ready pipelines of diligenced entrepreneurs and deals.

Also on this month’s Liist, Enterprise Community Partners is in the market with a fund to acquire and preserve affordable housing and share the financial upside with renters. Agriculture tech investor The Yield Lab is in the market with a new fund focused on Asia. 

(Disclaimer: The Liist and this post are based on available information, sourced by ImpactAlpha. Information has not been further reviewed by the managers nor verified by third parties, is not guaranteed for accuracy or completeness, and should not be relied upon as investment advice or recommendations. Nothing in The Liist, this post or on shall constitute an offer to sell or the solicitation of an offer to buy securities.)

Enterprise Renter Wealth Creation Fund 

Enterprise Community Partners has invested more than 40 years and $64 billion to strengthen communities and access to housing and homeownership. With its new Renter Wealth Creation Fund, the nonprofit’s goal is to help renters in the US seize “housing-based wealth-creation opportunities more traditionally afforded to homeowners.”

The planned $100 million fund will acquire affordable multifamily rental properties, preserve affordable rent rates for residents, and offer benefits including cash-back for on-time rent payments, new resident services, and also a share of profits to long-term renters when properties are refinanced or sold.

Enterprise will make investments of $3 million to $15 million per property. If the organization sells or refinances a property in the fund’s portfolio, investors would earn a 4% return; 80% of the remaining profits would be disbursed to tenants who had been in the building for four years or more.

The first properties in the fund’s portfolio will be a group of 13 buildings containing 125 rental units near Denver, Colo.

Enterprise has raised $63.5 million for the fund from the Ford and Robert Wood Johnson foundations, Arnold Ventures, four banks, a family office, fiscal sponsor and a high-net worth individual, as well as Enterprise itself.

The fund includes a first-loss layer as risk protection for other investors. It is open to accredited investors.

Contact Rob Bachmann for more information. 

Full Turn Capital

Los Angeles-based Full Turn Capital is supporting cities’ green transition with a $10 million fund that will make pre-seed and seed-stage investments in startups supporting clean transportation and mobility.

Founder Alex Mitchell, who identifies as LGBTQ, launched Full Turn in March of this year after five years with the Los Angeles Cleantech Incubator, which supports diverse-led cleantech founders in the LA area.

Full Turn similarly focuses on diverse founders and aims to build a portfolio of 30% women-led and 30% people of color-led businesses. It’s looking to build a portfolio of companies in the US and Europe that will collectively curb nearly 5,000 tons of CO2 per year.

Full Turn will make direct equity investments of $150,000 to $300,000, and also provide simple agreements for future equity, or SAFEs, and convertible notes. It has warehoused three deals for the fund, including a fintech venture that helps people rent and lease electric vehicles.

Full Turn has secured $1 million from investors.

Contact Alex Mitchell for more information.

Mirepa Investment Advisors

Small businesses in Ghana face an annual financing shortage of nearly $5 billion. Accra-based Mirepa Investment Advisors is raising a 120 million cedi (about $10 million) fund to invest in local manufacturing, green and tech-based businesses in key economic sectors, such as agriculture, financial services, healthcare and education.

Mirepa is targeting “missing middle” businesses needing $200,000 to $2 million in capital—a market segment shut out of bank financing because of high interest rates and largely unserved by other private investors. One example: a local rice producer whose product could see increased demand as a result of India’s recent rice export ban.

The firm is focusing in particular on businesses owned or run by women, and with local job creation potential.

Mirepa will make equity, quasi-equity and self-liquidating investments, such as revenue-based financing.

Mirepa has closed on half of its target with support from a cohort of local equity investors including Axis Pensions, CAL Asset Management Company Limited, Venture Capital Trust Fund and Petra Trust. The first-time fund management firm says it has succeeded in raising commercial capital without the use of concessionary investments.

Email the team for more information. 

New Majority Capital

New Majority Capital supports women and people of color to become business owners by acquiring existing small and mid-sized businesses and transferring ownership to diverse entrepreneurs. Its thesis: “Small business asset ownership will help close the wealth gap.” 

The firm runs an accelerator program to ready entrepreneurs to become business owners, then helps participants acquire companies to run. Among the ownership transfers it has supported is a Rhode Island-based sign and awning business, for which New Majority Capital provided a pre-acquisition loan to a veteran of Guyanese descent. It also facilitated an equity down payment on a Black-owned, Brooklyn-based insurance company.

New Majority capital is looking to raise $50 million for its first fund that will finance acquisitions and ownership transfers outright. It has backing through Realize Impact, a platform for using donor-advised funds for impact investments and ImpactAlpha’s early partner on the Liist.

The fund is open to acquiring businesses in any sector, though it targets ones that have been operating for about five years and with $2 million to $10 million in annual revenues. New Majority Capital has diligenced more than 250 businesses for the fund, including a garden furniture manufacturer in Massachusetts, a roofing company in Florida and a home healthcare business in Georgia.

The fund is open to accredited investors.

Email the team for more information. 

The Yield Lab Asia Pacific

St. Louis-based The Yield Lab invests in agtech ventures that are promoting a sustainable global food system. It’s looking to raise $50 million for an Asia Pacific-focused fund to support agtech entrepreneurs addressing needs in the region’s agriculture, aquaculture and food sectors.

“Emerging economies have an opportunity to leapfrog some of the negative impacts of agricultural industrialization while capitalizing on technology that facilitates wealth creation and improved land management in order to produce more with a lower ecological footprint,” the firm says.

The fund is domiciled in Singapore.

The Yield Lab Asia Pacific has invested in 10 companies, including India-based Credit AI, which is using alternative credit scoring methods to extend credit to smallholder farmers. In January it invested in Singapore-based insect farming venture Protenga.

Contact Rebekah Moses to learn more.