TGIF, Agents of Impact! We’re taking a Brief break to commemorate the Juneteenth holiday in the US. We’ll be back in your in-box on Tuesday, June 20.
🗣 Emancipation proclamation. Next week’s commemoration of Juneteenth celebrates liberation from disinformation as well as from slavery. It took more than two years for news of Abraham Lincoln’s 1863 executive order to reach Galveston, Texas. In the 158 years since then, the share of investment capital allocated to firms managed by people of color and/or white women has reached all of 1.4%. “We all have to recognize that the majority of wealth in this country was garnered by the taking of Native lands for no money and the free labor of African slaves,” Known Holdings’ Valerie Red-Horse Mohl tells me on this week’s Impact Briefing podcast. “We are not anywhere near an equitable distribution of capital.”
Known is building a diverse-led asset management firm to chip away at the disparity. At Momentus Securities, Alicia Reyes and Ellis Carr are taking a page from the corporate credit market to recycle capital for housing, healthcare, food and small businesses with “social collateralized loan obligations.” Ivy Jack and more than a dozen other members of Confluence Philanthropy are developing tools to help investment decision-makers advance racial equity, including through active ownership of public equities. Family offices and high net-wealth individuals, Toniic’s Dario Parziale reports, are embracing the use of catalytic capital to realize impact opportunities that otherwise would not come to fruition. Calvert Impact, Nia Impact Capital, CIRCA500, Impak and many others are using impact and equity lenses to bring new financial products to market. This week’s Agents of Impact Call (catch the replay) explored strategies that asset allocators are using to drive racial equity in the $4 trillion municipal bond market, which remains riven with systemic bias.
“We’re going to put it all together in a package that makes sense and logic for shifting this capital so we can celebrate Juneteenth in a way that isn’t just slogans and celebrations and philanthropic events, but actually we can see some capital shifting,” Red-Horse Mohl says, “so that our families of color are raising their median income, and they’re living in communities where the tax base is larger, and they’re achieving generational wealth and homeownership.” Agents of Impact aren’t waiting for good news to arrive. They’re changing history – by making some themselves. – David Bank
- Market shifts. Don’t miss Jessica Pothering’s tour of the new off-grid solar landscape in Africa, including interviews with Zola’s Bill Lenihan, Sun King’s Anish Thakkar and M-KOPA’s Jesse Moore.
The Week’s Podcast
🎧 Impact Briefing. Host Monique Aiken has the headlines and Known Holding’s Valerie Red-Horse Mohl joins David Bank to talk about moving capital at scale to elevate communities of color.
Despite all the efforts at diversity, equity and inclusion, little has meaningfully changed about how, where and to whom capital flows. Known Holdings is out to break the logjam. “Our goal is to shift capital through all of the ways of wealth creation,” says Red-Horse Mohl, who co-founded Known in 2021 with Nathalie Molina Niño, Jim Casselberry and Ushir Shah. “We manage assets, we deploy assets, and we shift capital to focus on eliminating the racial wealth gap.” Known is the rare Black, Indigenous, Latina and Asian American-owned asset management firm. It has quietly attracted investors looking to move 100% of their assets toward impact. “We have big ambitions to really shift capital in significant ways,” Red-Horse Mohl says on this week’s podcast.
The ambitions can be seen in one of the firm’s latest moves: the acquisition of Living Cities’ $100 million Catalyst Fund III, which invests in women and fund managers of color. Living Cities’ Demetric Duckett has joined Known as a managing director (see, “New decision-makers for the new majority“). Expect more deals like this as Known consolidates talent and capital for greater impact. “Our thesis is to invest in the best and the brightest. It’s also a thesis around positive impact in their strategies,” says Red-Horse Mohl, who at the East Bay Community Foundation moved most of the organization’s assets to managers of color. “It’s exciting to be able to do it in a much bigger way as we scale with Known.”
- Read on, listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
The Week’s Call
Agents of Impact Call No. 51: Muni impact. Demand for municipal bonds that address racial equity and other social issues outstrips the supply of such products. “This is a moment where we’re really seeing demand [for fixed-income investments] spike,” Preeti Bhattacharji of J.P. Morgan Private Bank said on this week’s Call. Bhattacharji joined Harvard’s David Wood and SEIU’s Renaye Manley, Breckinridge’s Tim Coffin, Heron’s Barbara VanScoy, and Lourdes Germán of the Public Finance Initiative to explore “racial equity audits” and other strategies asset owners can use to move muni bond managers, underwriters and issuers toward action and accountability.
The Week’s Dealflow
Deal Spotlight: Collapse of AeroFarms augurs a reckoning for vertical farming. AeroFarms has gone from the poster child of farming’s high-tech urban future to a cautionary tale. The Newark, NJ-based B Corp has for two decades promised to reengineer the food system with indoor growing methods that conserve resources and space and dramatically shorten food supply chains. It raised at least $238 million from investors, including from the government of Abu Dhabi for its pledge to grow food in the desert. Prudential Financial’s impact investing unit backed the company for its promise of job creation in Pru’s hometown of Newark. AeroFarms declared bankruptcy last week in federal bankruptcy court in Delaware. The news follows its failure to go public last year as investor interest in special purpose acquisition companies, or SPACs, evaporated. The company says it “expects to emerge stronger in coming months.”
- Tough run. AeroFarms’ bankruptcy is the latest in a string of bad news for vertical farming ventures, which have raised billions of dollars from investors (see, “Vertical farming ventures bring in the big bucks despite sustainability issues“). Germany’s InFarm raised more than $600 million before laying off 50% of its staff in December. California’s Plenty raised nearly $1 billion from Softbank, Walmart and others; it closed its San Francisco farm and laid off workers. Orlando-based Kalera was delisted from Nasdaq for poor performance this year, paused several US farms, and sold its international business. France’s Agricool was bought in distress by VIF Systems. Pittsburgh-based Fifth Season shuttered in October. Cincinnati-based 80 Acres laid off half of its workers. The list goes on.
- Unit economics. Consultant Henry Gordon-Smith called vertical farming’s path into the “trough of disillusionment” back in 2021. The farms’ hefty energy footprints have a major impact on operators’ timelines to profitability. “These farms are still incredibly expensive to build and, while demand is rising, the sector is still immature in its capacity to build large farms on time and deliver on projected unit economics,” he wrote.
- Slope of enlightenment. Scotland-based Intelligent Growth Solutions is bucking the trend. It is actively hiring and building a new facility in Dubai. Founder David Farquhar is critical of players who are “trying to do everything themselves.” He has called on operators to “grow up, start telling the truth, and publish real data.” Says Gordon-Smith: “Stakeholders must exercise due diligence, conduct thorough feasibility studies, and commit to making specific and measurable sustainable commitments.”
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Clean energy. Amp Energy India scored $250 million to ramp up commercial and industrial renewable energy generation… Generate teamed up with McKinstry to offer ‘energy as a service’ to schools, hospitals and public entities… Global Energy for People and Planet and All On committed $15 million to finance 25 solar mini-grid projects in Nigeria… Miami’s On.Energy closed a $20 million Series B round to develop energy storage capacity in Texas… Tem. raised £2.5 million to streamline renewable energy transactions for smaller buyers.
Climate finance. Raise Green snagged $3.5 million in seed funding from Connecticut Innovations Climate Tech Fund and Skyview Ventures… Generation clinched $1.5 billion for climate fund with impact incentives… Luxembourg-based climate impact verification venture Sustaincert raised $37 million.
Fund news. Boann Social Impact, Realize Capital Partners and Fonds de finance sociale – CAP Finance will manage $400 million of a $755 million Canadian government social impact fund… Positive Ventures secured $25 million to invest in Latin American founders building impact tech solutions for underserved communities.
Inclusive economy. Aviom Housing Finance scored $30 million to help low-income Indians become homeowners… Oman’s Sharakah invested in Dubai-based Beehive to increase peer-to-peer lending to Omani small businesses… Alitheia Capital invested in a $3 million round for Haul247, a Nigerian logistics tech startup.
Investing in health. Brazil’s Sami raised $18 million to offer affordable insurance and telehealth… Nigeria’s Helium Health scored $30 million to expand inventory lending… Keep Company raised $800,000 to provide caregiving support to workers.
Low-carbon transition. CubicPV raised $103 million for US production of solar wafers… India’s River and RevFin score investor backing to accelerate EV adoption… Rwandan electric motorbike manufacturer Ampersand has put more than 1,000 bikes on the road.
Returns on inclusion. Brown Venture Group secured a $3 million commitment from Huntington National Bank… London-based Black Seed raised £5 million to invest in Black-led enterprises in the UK… The NYU Impact Investment Fund invested $30,000 in EdVisorly.
Sustainable materials. Ecovative secured $30 million to produce fungi-based sustainable materials… Unspun snagged $14 million for its 3D weaving technology for sustainable manufacturing of textiles… VoLo Earth and Capricorn backed Magrathea to make carbon-neutral metal from seawater.
The Week’s Talent
MacArthur Foundation’s John Palfrey succeeded Ford Foundation’s Darren Walker as advisory board chair of the US Impact Investing Alliance. Walker will continue to serve on the Alliance’s advisory board… Common Future promoted Lauren Paul to vice president of strategic alliances.
Transform Finance’s Andrea Armeni joined the faculty of NYU’s Wagner Graduate School of Public Service as director of social impact, innovation and investment, succeeding Scott Taitel, who is retiring this fall… Marathon Capital hired Andrew Suh, a former managing partner at Mercury Value Partners, as country manager of its South Korean operations.
Denham Sustainable Infrastructure appointed Tim Radcliff, ex- of Solomon Partners, as managing director… Emma Sissman, a former portfolio director at SJF Ventures, joined Goldman Sachs as vice president of sustainable investments… Lafayette Square’s Antony Bugg-Levine stepped into an additional role as president of Lafayette Square Foundation.
Abbeygale Anderson of Cross Impact Capital, Edrizio De La Cruz of UFX, and Talib Graves-Manns and Wilson Lester of Partners In Equity were among 27 fund managers from 18 funds named to VC Include’s 2023 Fellowship for Impact Fund I Managers.
The Week’s Jobs
💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.
In New York, Cerberus Capital Management is recruiting an ESG and sustainability senior associate, SJF Ventures is hiring an impact director, and BerlinRosen is looking for a social impact and investing vice president… The Nature Conservancy is hiring an investment analyst in Arlington, Va.
Habitat for Humanity International seeks a real estate and impact investing associate general counsel in Atlanta… ECMC Group is looking for a remote impact investing director… The California Endowment seeks an impact investing officer for program-related investments in Fresno.
Jobs in Europe
The Greater London Authority is recruiting a green finance fund credit committee member… Inyova Impact Investing is hiring a people operations manager in Zurich… Blue Like an Orange is looking for a junior financial officer in Luxembourg… FMO is recruiting a senior portfolio analyst in The Hague, Netherlands… ICF is on the hunt for a sustainable finance managing consultant in Brussels.
Other global locations
Cycle Capital is looking for an impact investing analyst in Montreal… Water Mission is on the hunt for a finance manager in Honduras… 60 Decibels is hiring a Kenya head of office in Nairobi… ThirdWay Partners seeks an investment director in Johannesburg… Platinum Pacific Partners is on the hunt for a head of impact investing in Sydney.
That’s a wrap. Have a wonderful weekend.
– June 16, 2023