ImpactAlpha, February 6 – ImpactAlpha called out expanded ownership and access to capital to build wealth and bridge divides as a key trend to watch this year. Fund and investment managers are building out strategies that transfer agency and create wealth from real estate, businesses and the green transition.
Among the impact funds currently raising capital in the market are community-centric investors that are empowering local residents to make decisions about their neighborhoods; that are investing in critical and supportive social services; and that are supporting a just energy transition.
Other fund managers have developed strategies to bolster local workers’ economic resilience through good jobs and employee ownership.
On this month’s Liist:
- Cauris Finance a private credit provider to African mobility companies and small business lenders.
- Kensington Corridor Trust in Philadelphia, a women-led real estate investment organization that acquires properties for a local neighborhood trust.
- Maycomb Capital, a women-led investor, in the market with its second Community Outcomes Fund, provides working capital to community organizations supporting health equity, workforce development and early childhood development
- RuralWorks Partners, a rural business investment company that makes equity investments in rural sustainability-focused businesses in the US delivering good jobs
- Sunwealth’s Solar Justice Fund, which invests in community solar projects in low-income areas and/or that are developed by diverse- and women-led developers
- Wire Group’s Thrive Fund, a Netherlands-based impact fund of funds that ties its fund remuneration to impact
Check out ImpactAlpha’s database of more than 100 impact funds that have recently been featured on The Liist.
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 ImpactAlpha.com shall constitute an offer to sell or the solicitation of an offer to buy securities.
Cauris Finance
Cauris Finance’s mission is to accelerate better access to finance for small businesses on the African continent. The private credit fund backs Africa’s tech-enabled social enterprises that are using embedded finance and mobile money to help small businesses access credit and vehicle ownership. Cauris says the difficult investment environment has made it especially hard on startups and small businesses needing capital.
The firm has made eight investments in early- and mid-stage ventures in seven countries. Its capital has supported more than 200,000 borrowers including 20,000 small businesses. Investments include Uganda-based motorcycle finance company Asaak, and Ghana and Nigeria-focused logistics tech venture Jetstream.
Cauris is looking to raise $50 million in a blended-finance fund composed of three tranches: senior debt, catalytic junior debt, and first-loss capital. The fund has not yet made any investments.
- Type of investments: Senior secured debt
- Leadership: Founders based in San Francisco and Ouagadougou, Burkina Faso
- Impact metrics: IRIS+ aligned
- Contact information: Azer Songnaba
Kensington Corridor Trust
Kensington Corridor Trust is among a growing number of community actors harnessing legal structures and evergreen investment funds to preserve ownership of commercial and residential assets in fast-gentrifying neighborhoods. The organization, based in Philadelphia’s Kensington neighborhood, acquires properties and puts them into a permanent trust that members of the neighborhood govern and control.
The organization’s mission is to help neighborhood residents “dictate what’s happening and how it’s happening,” on their blocks, KCT’s Adriana Abizadeh told ImpactAlpha. “They’re the ones impacted.”
KCT has made 19 investments since it launched in 2019. It looks for deals of around $100,000. The organization is looking to raise $20 million.
- Type of investments: Debt for real estate acquisition
- Type of fund structure: Nonprofit investment fund
- Where fund is domiciled: US
- Leadership: Hispanic woman-led
- Commitments/investments to date: $11 million (Barra Foundation, Patricia Kind Family Foundation, Spring Point Partners, Knight Foundation, Kataly Foundation, Nonprofit Finance Fund, Halloran Philanthropies, WSFS Bank)
- Example impact metrics: Number of properties acquired; affordability preserved – residential and commercial; number of businesses attracted to the corridor
- Contact information: Adriana Abizadeh
- More background reading: “Turning local community ownership projects into a national movement“
Maycomb Capital Community Outcomes Fund II
Maycomb Capital lends to community organizations focused on early childhood development, workforce development and health equity. It’s hook: backing organizations funded through public contracts for community services and interventions. Such organizations often only receive payment once they have achieved predetermined outcomes. Maycomb provides the upfront working capital organizations need to deliver on their contracts.
“The repayment of an investment relies on cash flows that are tied to these outcome metrics. As a result, financial returns move in tandem with success on impact,” Maycomb’s team explains.
The women-led impact investment firm is in the market with its second Community Outcomes Fund, with a goal of raising $100 million. Maycomb raised its first fund of $53 million in 2018. The first fund has made a dozen investments and is 95% committed.
- Type of investments: Debt
- Type of fund structure: limited partnership
- Where fund is domiciled: US
- Leadership: Women-led
- Commitments/investments to date: Undisclosed anchor investor
- Example impact metrics: Improved pre-literacy skills, job attainment (determined on deal-by-deal basis)
- Contact information: Ariella Rotenberg
RuralWorks Partners
RuralWorks Partners invests in growing businesses delivering quality jobs and supporting the economic resilience of rural communities in the US Northeast and Upper Midwest. The Vermont and Minnesota-based investment firm is a joint venture between Community Reinvestment Fund, a community development financial institution, and Conduit Capital. It is a licensed USDA rural business investment company. The firm focuses in particular on businesses with an environmental impact angle, including sustainable agribusinesses, local and regional food systems, and waste recycling and the circular economy.
Rural Works is raising its first fund to make growth equity and debt investments of between $1 million and $4 million. The fund has made two investments to date: American Unagi, a sushi-grade eel farm based in rural Maine, and TimberHP, a producer of recyclable, renewable, non-toxic wood fiber insulation. RuralWorks has a preference for women-led and owned businesses. Its fund target is $100 million.
- Type of investments: Mostly equity; some revenue-based finance and subordinated debt
- Type of fund structure: LP/GP with impact-linked carried interest
- Where fund is domiciled: US (Delaware)
- Leadership: majority women-led; 50% female board
- Commitments/investments to date: $44.5 million
- Contact information: Louisa Schibli – [email protected]
Sunwealth Solar Justice Fund
Sunwealth was an early mover in community solar investing in the US. The Cambridge, Mass.-based firm partners with local solar developers and installers on rooftop and parking lot solar projects in communities underserved by other renewables financing. Its projects deliver energy savings to nonprofit organizations, multi-family apartment buildings, houses of worship, and commercial office buildings.
As the community solar sector evolves—and gains more attention—Sunwealth’s investment strategy emphasizes equity and diversity by targeting diverse- and women-owned solar developers. Its Solar Justice Fund will emphasize projects serving low- and middle-income communities; underserved regions like the US Southeast and Midwest; and community grid resilience through the integration of solar plus battery storage, microgrids and virtual power plants.
Sunwealth is targeting $60 million for the fund and will make investments of up to $500,000.
- Type of investments: Debt
- Where fund is domiciled: US
- Commitments/investments to date: $8 million
- Eligible investors: accredited Investors
- Example impact metrics: 50% allocation to women or diverse-owned or led developers; 50+ megawatts installed capacity; 35%+ of portfolio in low- and middle-income communities
- Contact information: Martha Buckley – [email protected]
Wire Group’s Thrive Fund
Wire Group spent 10 years helping European family offices develop and deploy impact investing strategies and five years building its own. Through its first fund of funds, it backed a dozen impact fund managers supporting European climate tech development, natural ecosystem regeneration, financial inclusion and healthcare access in emerging markets, and more. It’s in the market with a second fund of funds to invest in managers addressing “human and ecosystem healing.” Investment themes include regenerative agriculture, health and nutrition, sustainable forestry, and inclusivity for marginalized groups.
Wire Group is looking to raise €100 million and invest in an additional 12 to 15 fund managers. It has made one investment, backing Canada-based Cross-Border Ventures’ impact fund focusing on healthcare for women and children.
The Netherlands-based fund manager is known for its commitment to impact incentives—both for itself and the funds it invests in. The firm’s second fund links 100% of its carried interest to impact outcomes from its portfolio, and targets fund managers who also have a financial stake in their impact outcomes.
“Our work as a fund of funds exposes us to new innovations that may contribute to a more conscious economy, and challenges us to implement such mechanisms and best practices ourselves,” wrote Wire Group’s Ronald Janse in a guest post on ImpactAlpha.
- Type of investments: Mostly early- and growth-stage equity; some real assets
- Type of fund structure: Fund of funds with impact-linked carried interest
- Where fund is domiciled: The Netherlands
- Commitments/investments to date: €30 million
- Eligible investors: Private individuals and wealth managers
- Contact information: Paul Helmsing
