The Week in Impact Investing: Ingenuity

TGIF, Agents of Impact! 

🗣 Renewable resourcefulness. The Bay Area humorist and journalist Wes Nisker, who died this month at 80, was known for his radio signoff: “If you don’t like the news, go out and make some of your own.” Agents of Impact have long lived by that credo, this week led by the youthful climate plaintiffs in Held v. Montana who won a landmark ruling affirming their constitutional right to a healthy environment and their state’s obligation to consider climate damage in project approvals. In India, investors are pouring capital into EV startups, but the real leaders of the country’s e-mobility transition are the informal workshops assembling cheap and energy-efficient e-rickshaws, ImpactAlpha contributor Shefali Anand reports from Delhi. In a guest post, Acumen India’s Mahesh Yagnaraman describes how the firm’s patient investing has delivered wins such as Ziqitza Healthcare, the country’s first for-profit ambulance company, which after 10 years has served 48 million people and created a new market for emergency services. 

Ingenuity, along with resources, are in high demand in places like Maui, where devastating wildfires revealed decades of neglect in preparations for a changing climate, including massive underinvestment in an aging electric grid. As part of our ongoing coverage of “Muni Impact,” we highlighted Long Island Power Authority’s issuance of $400 million in bonds to boost that utility’s resilience to extreme weather events, with analysis by HIP Investor’s Rose Fadjia Joseph. To attract capital for climate resilience, African leaders are eyeing a bigger slice of the voluntary carbon credit markets, ImpactAlpha contributor Lucy Ngige reports from Nairobi. Amy Cortese reports on how private investors made the one-year anniversary of the Inflation Reduction Act a celebration of what US Steel’s David Burritt called the “Manufacturing Renaissance Act,” with $270 billion in commitments to some 80 domestic clean energy projects and manufacturing facilities in the past 12 months. To know which investments have the most impact, get started with impact ratings, the second video in our series with Impact Frontiers and Impact Capital Managers. Are you making impact news? Let us know. – David Bank

👋 Next Week’s Call: Indigenizing catalytic capital. Change Labs’ Heather Fleming and MacArthur Foundation’s John Balbach will join Kate Finn of First Peoples Worldwide, Navajo Power’s Brett Isaac, Siċaŋġu Co’s Clay Colombe and other Agents of Impact to share strategies for mobilizing capital in Indian Country, Wednesday, Aug. 23, 10am PT / 1pm ET / 6pm London. RSVP today.

The Week’s Podcast

🎧 Impact Briefing. Paris Prince of the Intentional Endowments Network joins host Monique Aiken on this week’s podcast to talk about how impact investors are responding to legal attacks on affirmative action and racial wealth-building strategies. 

• Bring it on. Prince is actually looking forward to the lawsuit filed against Atlanta-based Fearless Fund alleging “anti-white bias” in the firm’s grant criteria. “It underscores the 99% of VC firms that have not and do not do business with Black people,” Prince says. “Anti-white racism isn’t real. There have been studies on racial bias, and not a single one found a reliable anti-white bias.”

• Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.

The Week’s Agent of Impact

Monica Brand Engel, Quona Capital: Taking on the messy work of financial inclusion. Imperfect execution is ok. “Authentic impact is about accepting imperfection and actually getting things done,” Quona’s Monica Brand Engel tells ImpactAlpha. “If your standard is for 100% of every dollar to reach the most underserved person, you’re going to be sitting on capital for a long, long time.” At Quona, Engel and her team have invested in 72 companies, whose products and services have reached nearly 145 million people, 79% of whom are underserved, according to its latest impact report. Quona’s portfolio last year generated more than $1.5 billion in revenues, delivering local economic benefits and jobs.

Quona is a spinout of Accion, where Engel worked with then-CEO Michael Chu. He told her, “Monica, if you want to solve a problem as huge as world poverty, you have to mobilize a resource equally as immense, and that’s the world’s capital markets,” Engel recalls. At Accion, she helped microfinance institutions think beyond credit. Accion reaped a return of about $150 million on a $1 million investment in Compartamos Banco, leading to the establishment of Quona. The spectacular IPO “got us—negatively – on the front page of The New York Times,” Engel recalls. The gist of the article: “How can you say you’re helping the poor if you’re making so much money?”

Quona’s portfolio includes Creditas in Brazil, a home and auto equity finance provider for the emerging consumer class, and Yoco in South Africa, which is helping small businesses adopt digital payments. “The most successful companies in terms of IRR happen to be the most impactful ones too,” says Engel. “It really has to do with scale.” Quona has been trying to right the ship at ZestMoney in India, following a failed acquisition bid for the buy-now, pay-later startup. With new leadership in place, Quona and other ZestMoney investors are doubling-down. “It’s going to be a little imperfect, a little messy,” says Engel, “but we get it done.”

• Keep reading, “Taking on the messy work of financial inclusion,” by Jessica Pothering on ImpactAlpha and share the story on Instagram.

The Week’s Dealflow

Deal spotlight: Employee ownership as a competitive advantage. KKR’s acquisition of publishing giant Simon & Schuster suggests employee-ownership strategies can give investors an edge. When Simon & Schuster’s Jonathan Karp explained to staff why KKR had won the $1.6 billion auction, he touted the private equity firm’s pledge to include employees as owners. KKR will give all of Simon & Schuster’s more than 1,600 employees equity stakes. Since 2011, KKR has implemented broad-based employee ownership programs at more than 30 companies. 

• Ownership economy. UK-based Churchill Group became an employee-owned business. This week, the facilities management firm placed more than half of its shares in an employee ownership trust. “We were impressed by the benefits of becoming an employee-owned business,” said Churchill’s James Bradley. Separately, Ownership Catalyst Fund, co-managed by Mission Driven Finance and Project Equity, invested in CT3 Education’s transition to an employee stock ownership plan. The San Francisco-based company serves teachers, principals and other educators in underserved communities.
  
• Share the wealth. KKR helped launch Ownership Works last year and enlisted TPG, Apollo and dozens of other private equity investors to pledge to give equity shares to employees at some portfolio firms. The goal: to create $20 billion in wealth for low- and moderate-income workers (see, “Is private equity’s employee ownership plan the real deal?”). In KKR’s $3 billion sale of CHI Overhead Doors to steel company Nucor Corp. last year, 800 workers received average cash payouts of $175,000 – a small portion of KKR’s 10x return.
  
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Agri-food investing. Farmland LP’s third fund raised $33 million for organic and sustainable farmland… Phospholutions secured more than $10 million for sustainable phosphorus fertilizer… UK-based Clean Food Group raised £2.3 million to develop sustainable alternatives to palm oil.

Built environment. IFC provided $236 million to Absa to finance green real estate in South Africa.

Climate tech. ElectroTempo, which provides demand-forecasting software for electric vehicle charging networks, raised $4 million… TechMet raked in $200 million to meet global demand for critical minerals… Arizona-based Persefoni raised $50 million for its AI product for carbon accounting and management… Direct-air carbon capture got a boost from federal funding and Occidental Petroleum… Regeneration.VC and The 22 Fund led a $2.4 million seed round for Nature Coatings, an LA-based biochemicals startup.

Conservation finance. Gabon raised a $500 million blue bond to swap debt for nature. 

Education finance. Brazil’s Educbank raised $40 million to offer receivables financing to low- and mid-cost schools… Oikocredit provided a $1.5 million loan to Ed Partners Africa to finance school facilities in Kenya. 

Energy transition. Advanced Ionics raised $12 million to develop electrolyzers to support the production of green hydrogen fuel… Residential solar company PosiGen secured a $12 million loan to make solar energy available in low- and moderate-income communities in the US… Caelux snagged another $12 million to make solar panels more efficient… Germany’s Kraftbock secured €20 million for sustainable thermal storage for energy-intensive industries… Renewa scored $450 million to invest in renewable energy developments in the US.

Green SPACs. Bioplastics developer Verde Bioresins is planning to go public on the Nasdaq exchange via special purpose acquisition company TLGY Acquisition Corp… Wind power developer One Energy Enterprises announced TortoiseEcofin Acquisition Corp. III will acquire the company and take it public on the New York Stock Exchange.

Impact tech. Omidyar Network India, Quona Capital and other investors doubled-down on embattled buy-now, pay-later startup ZestMoney… The De-Carceration Fund raised $8.5 million to invest in ‘justice tech’… Mastercard Foundation and J&J Impact Ventures invested $114 million in Founders Factory Africa.

Place-based investing. Truist added $15 million for naturally-occurring affordable housing in Charlotte… American Heart Association, through its impact investing arm, directed $850,000 to four organizations in LA.  

The Week’s Talent

Marc Becker, former co-head of impact investing at Apollo Global Management, passed away on Monday this week. The 51-year-old had pancreatic cancer… Larry Sacks, ex- of USAID, joined DFC as chief development officer… Tsitsi Masiyiwa, co-founder and chair of the Higherlife Foundation, succeeded William Campbell as board chair of The END Fund. 

Ted Ferguson, former chief sustainability officer of Profoundry, joined Silfab Solar as ESG director… Jeff Waters, ex- of Maxeon Solar Technologies, replaced Geoffrey Brown as CEO of Portland-based Powin… The US International Development Finance Corp. names Nisha Desal Biswal, ex- of the US Chamber of Commerce, as its deputy chief executive officer.

Ted Maa, a former partner at Pine Brook, joins Nuveen as managing director of private equity impact investing… Karla Magana Figueroa, ex- of JPMorgan, joins Candide Group as a senior investment manager, and Mel Rusinek, ex- of NYC Fair Trade Coalition, joins as a client services associate… Oona Poropudas, ex- of Auxxo Female Catalyst Fund, joined Aurum Impact’s investment team. 

Michael Pugh, ex- of Carver Bancorp, became CEO of LISC… Christian Rosenholm, formerly an ESG advisor for the Export and Investment Fund of Denmark, joins the GIIN as director of institutional engagement… Rob Meloche, ex- of Strategic Impact Advisors, joined 2X Global as director of partnerships and impact.

The Week’s Jobs

💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.

US East Coast

In New York: JPMorgan Chase seeks an impact finance credit solutions vice president in New York; Columbia University’s Center for Development Economics and Policy is hiring a research associate; The city of Ithaca, NY seeks a sustainability planner; and KKR Global Impact has an opening for a senior manager. 

Rockefeller Foundation is on the hunt for a managing director to manage its Food is Medicine program in Washington, DC… Also in DC, Accion seeks a managing director for its Center for Financial Inclusion… Raise Green is hiring an investor marketplace associate in New Haven, Conn. 

Other US locations

Social Finance is hiring a VP for investor relations… The Environmental Policy Innovation Center is looking for a biodiversity markets program manager and a water equity-focused manager for the Southeast US… Sorenson Impact is looking for a student program associate in Salt Lake City.

In Asia

60 Decibels seeks a manager in Bangalore… KKR Global Impact is recruiting an associate in Singapore… Also in Singapore, Macquarie Group is looking for an ESG and climate associate director or vice president.

In Europe

Zubi Wealth Management is hiring a multi-asset investment analyst or manager in Madrid… Palladium is recruiting a deputy lead for its capital advisory services team in London… Abrdn is recruiting a real estate ESG asset manager in Amsterdam.

Other global locations

ResponsAbility is hiring a climate finance project manager and a climate-smart agriculture technical specialist in Lima, Peru… London Stock Exchange Group has an opening for a sustainable finance senior content market specialist in Johannesburg… Finance in Motion has an opening for a senior officer in Nairobi.

Remote positions

WaterEquity seeks a chief investment officer… Quantified Ventures seeks an associate director of water and climate finance… US Bank is recruiting an environmental finance impact capital manager… Tides has several openings, including an impact investing vice president.

That’s a wrap. Have a wonderful weekend.

– Aug 18, 2023