TGIF, Agents of Impact! We’re taking a Brief break for the U.S. holiday. We’ll be back in your inbox on Tuesday, Feb. 16.
Motivation to act. “Change the incentives, change the results,” declares ImpactAlpha’s Dennis Price, writing about impact-linked financial bonuses that are unlocking lending to agricultural businesses in Latin America (see No. 2, below). A little catalytic capital can indeed go a long way. But direct financing is only one of many incentives. Jessica Pothering identifies the climate bonus many gender-lens investors are realizing on investments in, by and for women (No. 1). The unlikely partners behind Due Diligence 2.0 have used arguments about reduced risks and expanded opportunities, along with racial justice, to secure commitments to root out bias in asset allocation, as Monique Aiken elicits in our new podcast series, The Reconstruction (No 3). Amy Cortese traces Hope Enterprise’s Bill Bynum’s lifelong motivation to the mutual support he experienced as a young man building a small-town credit union in North Carolina (see, Agent of Impact). “That’s how people helped each other, by pooling their resources and working together,” Bynum says. Mutual support keeps us going, too. As the newest member of ImpactAlpha’s team, Roodgally Senatus, who today becomes a U.S. citizen, likes to say, “Teamwork makes The Brief work.” – David Bank
Impact Briefing. On this week’s podcast, host Monique Aiken checks in with Suzanne Biegel in London to debrief on this week’s GenderSmart Investing Summit. We hear from Bill Bynum of Hope Enterprise in Jackson, Miss., this week’s Agent of Impact. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 6
1. Gender investors’ climate edge. Investments in, by and for women often have co-benefits for climate adaptation and mitigation. The corollary: employing a gender lens can provide an edge for climate investors. “Climate change disproportionately impacts women, particularly those with fewer resources, but women are also disproportionately part of the solution,” says Suzanne Biegel. Keep reading.
- Agents of Impact Call No. 27. Explore global opportunities at the intersection of gender and climate with entrepreneurs, investors and special guests, Tuesday, Feb. 23, at 9am PT / 12pm ET / 5pm London / 8pm Nairobi. RSVP today.
2. Incentivizing impact in Latin America. Catalytic backers provided a bonus for Root Capital to lend to agribusinesses in Latin America deemed too small or too risky for other lenders. Such “social impact incentives” are proving effective at incentivizing companies and fund managers to serve lower-income customers and early-stage enterprises otherwise unable to access finance. Onward.
3. Taking on racial bias in asset allocation (podcast). The broad problem of systemic bias in the asset management industry became very specific when fund manager Rachel Robasciotti pitched her services to an investment committee affiliated with Brent Kessel’s Abacus Wealth Partners. Robasciotti and Kessel, along with allies Tracy Gray and Erika Seth Davies, recount to host Monique Aiken the origins of the Due Diligence 2.0 Commitment. Read on and listen.
- The Reconstruction. Catch up on Monique’s conversations with 1863 Ventures’ Melissa Bradley, Marguerite Casey Foundation’s Carmen Rojas, and Gene Bruskin, creator of the musical play, “The Moment Was Now.” Listen on Spotify, Apple or Anchor.
4. A gig economy that serves workers. Employees able to work from home have been shielded from both the coronavirus and layoffs, while millions of low-wage service workers, particularly women and people of color, face lost jobs and increased exposure. The nonprofit Workers Lab in Oakland, Calif., backs ideas for supporting workers, families and a just recovery. The moment is ripe to “re-envision the gig economy so that it actually serves workers better today,” said Hays Witt of Driver’s Seat Cooperative, which is helping ride-hailing and delivery drivers optimize their work time across multiple platforms. Dig in.
5. Impact funds struggle while ESG funds roar. New private impact funds worldwide raised just €10 billion ($12 billion) last year, down by more than two-thirds from 2019, according to Phenix Capital’s Impact Fund Universe report. With a global pandemic, an economic shutdown, the climate emergency and a mass mobilization for racial justice, impact investors could have turned on the tap last year. They didn’t. But in public equities, investors are pouring tens of billions into sustainability-themed stock funds, making “ESG” one of the hottest trends in asset management. Keep digging.
6. Deploying corporate cash for impact, not Bitcoin. Corporations are sitting on a collective $4 trillion in cash, fueled by tax cuts and low-cost borrowing. How they deploy their assets could shape the economy for decades. Tesla made a mint on its $1.5 billion investment in Bitcoin, the speculative digital currency. Other options for corporate cash: small-business lending, decarbonization efforts, affordable housing – and paying taxes. More.
The Week’s Agent of Impact
Bill Bynum, Hope Enterprise. Goldman Sachs’ commitment this week of $130 million in credit to Jackson, Miss.-based Hope Enterprise was the latest, and one of the largest, shows of corporate support for community lenders. Founded by Bynum in 1994, the community development financial institution and credit union is a lifeline to rural communities across the U.S. South. Last year, Netflix made a $10 million “transformational deposit” in Hope Credit Union. Goldman is backing Hope’s Deep South Economic Mobility Collaborative, which brings together historically Black colleges and universities and cities like Birmingham, Little Rock and Memphis to help small businesses and their employees weather the pandemic. Says Bynum, “As the country becomes increasingly diverse, we cannot afford to leave so many people behind.”
As a child, Bynum’s family moved from Harlem to the still-segregated small town of Bynum, N.C., named after the family’s enslaved ancestors. A small credit union run out of a garage served the Black community. “That’s how people helped each other, by pooling their resources and working together,” Bynum told Delta Business Journal. “It was an enormous influence on me.” Bynum passed up law school to help build the credit union into the $1.5 billion Self-Help Credit Union and helped expand the North Carolina Rural Economic Development Center. He moved to Mississippi to found Hope in 1994 and has since generated nearly $3 billion in financing across economically-disadvantaged areas of Alabama, Arkansas, Louisiana, Mississippi and Tennessee. Hope is a member of Partners for Rural Transformation, a consortium of CDFIs working in regions of persistent poverty. Bynum, who served on the Biden-Harris transition team, is encouraged by increasing corporate support for community lenders and minority-owned financial institutions. “It’s really exciting to see these issues get more attention,” he says. “We’ve got to make sure that we don’t overlook the most vulnerable people in places here in the epicenter of this country’s long, long struggle with race.” – Amy Cortese
- Share Bill Bynum’s story and like it on Instagram.
The Week’s Dealflow
Responsible fintech. Indian fintech venture SarvaGram secures $10.5 million to serve rural households. Elevation Capital led the company’s Series B funding round, which also included existing investor Elevar Equity… Level clinches $1.5 million to offer income-based loans to gig workers… PasarPolis secures $5 million from the IFC… Ada Ventures invests £2.5 million in Tickr to expand retail impact investing in Europe.
Frontier finance. Incofin commits $1 million to farmers and micro-businesses in Uganda… AgroCenta raises seed funding to support Ghana’s smallholder farmers… Monkey Exchange scores $6 million to improve access to small-business credit in Brazil… Antler commits $100,000 each to a pair of Kenyan startups.
Fund news. Kindred Ventures raises $100 million second early-stage fund… SJF Ventures closes $175 million fifth fund to ride COVID acceleration… Women-focused Halogen Ventures closes second fund at $21 million… PGIM secures £190 million for U.K. affordable housing fund.
Low-carbon transition. Vale and Energy Impact Partners back Boston Metal’s ‘clean steel’… C-Zero raised funding from Breakthrough Energy Ventures… Electric bike company Rad Power Bike secures $150 million… Energy Impact Partners takes stake in battery maker Powin Energy.
Impact bonds. Indian government backs social impact bond to improve public health services… The European Bank for Reconstruction and Development and UNDP are structuring Armenia’s first impact bond… Uniting Communities and Social Ventures Australia are expanding an Australian SIB focused on foster children.
Conservation finance. Africa’s Great Green Wall to combat desertification secures $16.8 billion in commitments.
The Week’s Talent
Maurice Jones is stepping down as CEO of the Local Initiatives Support Corp. to lead OneTen, a corporate initiative to advance the careers of a million Black Americans without college degrees. Jones will continue to serve on LISC’s board… JPMorgan Chase hires former U.K. parliament member Chuka Umunna to lead its environmental, social and governance efforts… Vanguard appoints Fong Yee Chan, ex- of FTSE Russell, as head of ESG strategy in Europe.
Ibrahim Rashid (University of Chicago), Trevor William Smith (University of Cincinnati) and Eileen Ung (U.C. Berkeley) are among TPP Capital’s place-based social impact investing fellows… ‘Technology futurist’ David Shrier joins London’s Imperial College Business School and venture builder initiative at the Centre for Digital Transformation… Sara Aminzadeh is named vice president of partnerships at the US Water Alliance.
Kerry Bowie of Msaada Partners and Daniel Goldman of Clean Energy Ventures launch Browning the Green Space, an initiative to create green sector opportunities for people of color… Inclusive Capital Partners’ Jeff Ubben is under consideration for a board seat at ExxonMobil… Don Baylor Jr., ex- of the Annie E. Casey Foundation, is Lafayette Square’s new managing director of services… Thierry Koffi, ex- of Root Capital, joins ISF Advisors as West Africa manager.
The Week’s Jobs
TPG Rise Fund’s Y Analytics is recruiting a manager of impact solutions, a climate-focused ESG performance and impact associate and an ESG performance associate… CDC Group is hiring an executive/manager of development impact management in its infrastructure and climate group in London… KKR Capstone seeks a climate strategy and resources management associate… LISC is looking for a senior financial analyst in New York.
The Global Impact Investing Network is hiring an institutional asset owners manager in New York… Confluence Philanthropy’s climate solutions collaborative seeks a senior program manager… Social Capital Partners is hiring an associate / senior associate of investments in Toronto… ABC World Asia is looking for an impact and ESG analyst in Singapore… Nearly 150 Luminate partners are hiring for 350 jobs… BLCK VC seeks an executive director.
Blue Marble is hiring a chief technology officer in Europe… Pacific Community Ventures is recruiting a chief of staff in Oakland… DivInc. seeks a manager of strategic partners in Austin… North Sky Capital is hiring an associate for marketing and investor relations in Minneapolis… Acumen America is looking for a senior associate of partnerships in San Francisco… Ignia is recruiting an investor relations manager in Mexico City.
That’s a wrap! Have a wonderful weekend.
– Feb. 12, 2021