The Week in Impact Investing: Elections

TGIF, Agents of Impact! 

• Climate on the ballot
• Damien Dwin on investing in working-class people and places
• Five Latam fund managers finding alpha in impact 
• Wave of blue economy funds 

🗣 Counter-programming. Many news outlets have been consumed with the implications of the verdict in the case of a certain candidate (and former president) on the upcoming US election. As they zigged, ImpactAlpha zagged, to highlight instead the climate stakes in this week’s elections in Mexico, India and South Africa, with Jessica Pothering’s dive into Mexican politics and contributing editor Shefali Anand’s report from Delhi (where temperatures this week reached 126 degrees Fahrenheit). ImpactAlpha launched The Brief in January 2017, the same week that same former president was inaugurated, and grew up by (largely) avoiding being sucked into the vortex that followed. Steady on. This week, we bucked the trend toward polarization with my Agents of Impact podcast conversation with Lafayette Square’s Damien Dwin, who is trying to crowd in capital for working-class places and people. “We are betting on America. This is a pro-America agenda,” Dwin told me. “We believe you should run toward Washington, not away from Washington. We believe you should run toward public policy, not away from public policy. We believe you should run toward regulation, not away.”

Agents of Impact operate within the same larger context as all investors and entrepreneurs, but are perhaps more apt to look beyond the daily headlines. Brian Wayne of Curvepoint Capital, which this week spun out of Aegon Asset Management, sees an opportunity for the firm’s brand of structured finance as government incentives, corporate demand and falling cost curves for climate solutions create what he calls “a snowballing effect.” In Brazil, Vox Capital diversified its offerings across asset classes to accommodate investors’ appetites for liquidity, risk and time horizons, as Vox’s Daniel Izzo and Daniel Brandão explained. ImpactAlpha’s Dennis Price has video interviews with a handful of other fund managers in Latin America who are likewise betting on the region’s entrepreneurial energy (see Agents of Impact, below, or the latest edition of ImpactAlpha Latin America). Impact accounting that accounts for the value created (or destroyed) for all stakeholders finally appears to be converging on the simpler and interoperable standards that investors demand. As Dan Osusky of the International Foundation for Valuing Impacts concludes, “It isn’t the only solution to the world’s challenges, but it just might be a necessary one.” – David Bank 

The Week’s Podcasts

🎧 This Week in Impact. Host Brian Walsh takes up ImpactAlpha’s top stories with editor David Bank. Up this week: climate is on the ballot across the globe, whether politicians admit it or not; how impact accounting standards are meeting investors’ demands for interoperability; and what it means to build bridges across the “missing middle” for commercial climate solutions.

• Listen to the new episode of This Week in Impact. Get the podcast in your feed by subscribing on Apple or Spotify.

• Agents of Impact. On this week’s Agents of Impact Podcast Damien Dwin, founder of Lafayette Square, joins David Bank to talk about lending to middle-market businesses reaching low- and middle-income people and places away from the coasts.

The Week’s Agents of Impact

These Latin American fund managers are seeking alpha in climate tech, edtech and impact (videos). From Mexico to Chile to Argentina, fund managers in Latin America are finding overlooked opportunities for impact – and returns – in the region. Despite a venture capital correction, managers are betting on the region’s entrepreneurial talent, youthful population and homegrown solutions to climate change and inclusive growth. “A new generation of emerging managers is building on those positive trends to deliver high returns,” notes Ana Maria Aristizabal of Winnipeg Ventures, an edtech and future of work fund. Larger venture investors such as Softbank and General Atlantic have also delivered returns on their Latin American investments. Five fund managers share their perspective in video interviews from this year’s FLII in Merída, Mexico. 

• Christian Quiñones of Innogen Capital is backing impact startups in Central America’s Northern Triangle (video interview). The El Salvador-based fund manager raised one of the earliest impact funds in Central America and is raising a third with catalytic funding from the US International Development Finance Corp. The fund aims to reduce migration, create fairly paid jobs, and nurture a bigger ecosystem, says Quiñones. “It’s the last uncharted territory for venture capital in LatAm.”

• Aldo Soto of Amazonia Impact Ventures is providing sustainability-linked loans to Indigenous producers in the Amazon (video interview). The impact-first fund manager is raising its first fund to promote sustainable land use, forest restoration and improved livelihoods in the Amazon. By lending through cooperatives, Amazonia can reach thousands of Indigenous farmers and producers, whom Soto calls “strategic actors to address climate change and biodiversity loss.”

• Andres Baehr of Savia Ventures is tapping into Latin America’s climate tech opportunity (video interview). The Mexico City-based VC has backed five startups from its debut fund. The region offers lower valuations, abundant natural resources and nearshoring trends. “All of that will need solutions that reduce the amount of energy, optimize logistics and use better processes,” Baehr says. “And all of that is climate tech.”

• Justin Schwartz of Impaqto Capital delivers revenue-based finance for impact businesses in the Andean region (video interview). Impaqto supports companies that are too small for institutional equity or bank debt. “As a local fund, we know the entrepreneurs well, we know the ecosystem well,” says Schwartz. “We can be one of the first checks and help those companies have more visibility at the regional and global level.”
  
• Ana Maria Aristizabal of Winnipeg Ventures is investing in the future of education and work in Latin America (video interview). Winnipeg, based in Lima, Peru, has backed 13 companies and is actively raising a “go-to fund that can lead rounds, that can support [businesses] in their own way, that can connect the dots, that can bring other investors from the region or overseas to support their growth,” Aristizabal says.
  
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The Week’s Deal Spotlight

With new Oceans Engagement Fund, UBS rides the waves of the blue economy. UBS Global Wealth Management is rolling out a blue economy impact fund to invest in 50 small and mid-cap public equities in wastewater treatment, plastic recycling, sustainable aquaculture and other ocean health issues. The Ocean Engagement Fund, a partnership with Rockefeller Asset Management, is the sequel to a $212 million sustainable oceans equity fund launched by Rockefeller and Credit Suisse, which UBS acquired last year. The new fund, which is open to European investors, “is a compelling opportunity for investors seeking uncorrelated returns and ocean health impact via shareholder engagement,” said Casey Clark of Rockefeller. Rockefeller will manage the portfolio.

• Life below water. Phenix Capital has identified 52 blue economy funds that are looking to raise a combined €13 billion ($14 billion). The Dutch research firm identified 164 funds that have raised €45 billion since 2015 for SDG No. 14, “life below water.” (See, “Global Fund for Coral Reefs blends opportunity and urgency to finance ocean resilience.”) The biggest blue economy investors are foundations, followed by corporations, family offices and banks.
  
• Ocean advisory. The Ocean Foundation, a Washington, DC-based nonprofit, will advise UBS and Rockefeller on the Ocean Engagement Fund. “Together, we hope to encourage companies to adopt ocean-friendly products, services or practices,” Ocean Foundation’s Mark Spalding told ImpactAlpha. What’s in it for them? “Reducing corporate reputation and environmental and social liability risks, and improving ocean health which can generate profits and shareholder value.”
  
• Go with the dealflow. Share this post and check out the full roundup of ImpactAlpha’s deal reporting this week.

The Week’s Talent and Jobs

💼 See and share more than a dozen new impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here.

Lafayette Square launched the Lafayette Square Institute, which will be led by Antony Bugg-Levine as president… New Energy Nexus named Henri van Eeghen, a veteran of Cordaid, Mercy Corps and the Synergos Institute, to succeed CEO Danny Kennedy in August… Liz Landon, a former chief people officer at Fishawack Health, became chief people officer at Tides… Vanguard tapped Salim Ramji, a former BlackRock executive, as CEO. 

Croatan Institute welcomed Lisa Wolf, the former CEO of US SIF, as a board member… Karthik Venkataraman, previously with Bain & Company, joined Accion as chief operating officer… ImpactA Global appointed Clodagh Bourke, previously with Aptimus Capital Partners, as head of fundraising, and Lindsey Bass, formerly with Legal & General Investment Management, as head of marketing and strategic partnerships. 

Jorge Cruz returned to LISC as executive director of LISC Greater Newark… Secha Capital hired Nina Verder, previously with Verder Group, as principal and operator-investor… Julia Ricaurte joined Latimpacto as assistant director… Maty Ndiaye, previously with Admaius Capital Partners, joined Mediterrania Capital Partners as its West Africa managing partner… Angelica Guzman Rendon, previously with the California-Mexico Studies Center, joined Impact Charitable as economic mobility program coordinator.

Alison Rapaport Stillman stepped down as founding general partner of Serena Ventures… Elizabeth Blankenship-Singh, previously with Climate Tech Circle, joined Overlay Capital as a senior associate… Daniel Heichner joined Community Investment Management as managing director of strategy and client solutions… Rofem Egbe, a former portfolio manager at Co-Creation Hub, joined Mercy Corp Ventures as an investment associate… Colorful Capital promoted Soltan Bryceto general partner.

That’s a wrap. Have a wonderful weekend. 

– May 31, 2024