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The Week in impact investing: Repricing



TGIF, Agents of Impact! 

Repricing impact. The COVID crisis and social protests have laid bare systemic injustices and spurred a broad repricing of assets and risks. Hedge fund manager Jeff Ubben has spotted an opportunity in pressuring companies to boost their positive social and environmental impacts, which he says remain undervalued as risk mitigants and drivers of value (see No. 1, below)Tynesia Boyea-Robinson says America is undervaluing its Black-owned businesses (see Agent of Impact). The Vatican called on Catholic institutions to divest climate risks in their portfolios (No. 5). Mispriced risks in green infrastructure mean opportunities for investors (No. 4). Spotting mispriced risks and undervalued assets can drive impact alpha. Repricing them can help ensure the post-COVID economy is equitable and sustainable.

Impact Briefing. On this week’s podcast, Brian Walsh has the headlines and a recap of yesterday’s Agents of Impact Call. And I profile CapEQ’s Tynesia Boyea-Robinson, the force behind Path to 15|55 and this week’s Agent of Impact. Tune in, share, and follow us on AppleSpotify or wherever you get your podcasts.

– Dennis Price

The Week’s Big 8

1. Jeff Ubben’s come-to-impact moment. “Finance is done,” says the ValueAct founder and activist investor, who is turning coat on traditional finance in favor of impact investing in public markets. Pushing companies to tackle environmental and social issues can create big returns—exactly what he aims to do with his new firm, Inclusive Capital Partners. Here’s why.

2. COVID relief for small and growing businesses. Emerging markets businesses are treading water and desperately seeking financial lifelines. A quarter of them will likely fail. “But there’s also an opportunity to save businesses that would only go out of business because of COVID-related factors,” says Drew von Glahn of the Collaborative for Frontier Finance. CFF is spearheading one of three new funding initiatives to rescue struggling companies and position them to grow through the recovery. Mobilizing money.

3. Shareholders push to protect stakeholders. Shareholder resolutions involving human and worker rights made up the largest category of such proposals this year. Pressure will grow next year, when worker health and safety, inequality, racial justice and other issues sparked by the COVID crisis and the killing of George Floyd are expected to dominate annual general meetings. Another flash point: excessive stock buy-backs. Level up.

  • Protect investors, not corporations. Proxy voting has helped put issues like gender diversity and emissions reporting on the corporate agenda. New rules proposed by the U.S. Securities and Exchange Commission threaten that progress, write Council of Institutional Investors’ Ken Bertsch and US SIF’s Lisa Woll, who urged the SEC to withdraw the proposals. Speak out.

4. Mobilizing capital for green infrastructure (audio). Falling price curves for renewables and the persistence of mispriced risks mean investors can still find opportunities in green infrastructure. The market is signaling an acceleration of climate-friendly infrastructure, agreed Agents of Impact on ImpactAlpha’s call last week. But global climate investment still falls far short of what’s needed. Tune in.

  • Replays. Find audio recordings of other Agents of Impact calls here.

5. Catholic institutions ramp up climate action. The Vatican called for divestments from fossil fuels in a 225-page manual for Catholic congregations seeking to implement Pope Francis’ 2015 call for climate action. Institutions like Georgetown University have committed to divestment. Congregations of Dominican Sisters are increasing capital commitments to clean energy and to communities impacted by climate change. Go deeper.

6. Racial justice pledge. More than 100 asset managers, foundations and faith-based investors organized by the Racial Justice Investing Coalition pledged to address structural racism, acknowledging investors’ role in perpetuating racist systems and how they benefit from them. Share this.

7. Making India’s social stock exchange more inclusive. India’s pioneering social stock exchange could bridge capital gaps for social enterprises. But more needs to be done to help small and under-prepared businesses meet eligibility requirements, writes AZB & Partners’ Chitrangda Singh. Read on.

8. Coalition to upstart creative capital. Ten institutions and individuals are joining an Upstart Co-Lab-led coalition with three-year commitments to move capital to creatives. “The creative economy has a critical role to play in an equitable COVID-19 economic recovery and needs values-aligned capital more than ever,” says Darren Walker of the Ford Foundation. Take a spin.

The Week’s Agent of Impact

Tynesia Boyea-Robinson, CapEQ. America is undervaluing its assets. Tynesia Boyea-Robinson is helping reprice them. Black-owned businesses are pathways to wealth and jobs in the Black community and a source of untapped growth for the U.S. economy. But they’re not well served by existing capital products or business support services. Many Black businesses, like beauty salons and barbershops, childcare and home healthcare services, are cut off from resources needed to hire and grow. “No one is looking at what the needs are of those markets,” Boyea-Robinson told ImpactAlpha. Boyea-Robinson and her advisory firm CapEQ launched Path to 15|55 to build for Black business owners the type of support available to their white peers. “It’s policy working for you, it’s capital working for you, it’s your community seen as an asset not a liability,” she says. The goal of Path to 15|55 comes from the findings of an earlier report: 15% of Black-owned businesses hiring at least one additional employee could generate 600,000 jobs and add $55 billion to the U.S. economy.

Recent investments in companies like Mayvenn (beauty salons), Squire (barbershops) and CareAcademy (home healthcare) are showcasing the untapped value in meeting the needs of Black-owned businesses. Boyea-Robinson aims to recast assets in the Black community to investors who have yet to recognize such opportunities. “Capital landing and flowing in a way that is not trying to upend and uproot what that community has, but figure out how to make it flourish with what it has, is a revolutionary act,” says Boyea-Robinson. As chief impact officer of Living Cities, she worked with entrepreneurial hubs serving Black businesses in cities like New Orleans and Albuquerque. A high-school job at NASA shaped Boyea-Robinson’s expectations of what’s solvable. “My first example of what it looked like to work in the world was that humans can put people in space,” she says. “If we can put people in space, we can solve our world’s most intractable problems.” – Dennis Price

  • Revaluing Black-owned businesses. In a guest post on ImpactAlpha, Boyea-Robinson lays out her plan to accelerate Black-owned business growth and employment, in partnership with Surdna Foundation, the W.K. Kellogg Foundation and the Brookings InstitutionPath to 15|55.
  • Share Boyea-Robinson’s story and like it on Instagram.

The Week’s Dealflow

The latest. Ford Foundation’s $1 billion social impact bond issuance was oversubscribed nearly six-fold. The 30- and 50- year bonds priced at 2.4% and 2.8% respectively. Proceeds will be used to ramp up grantmaking for COVID relief and recovery.

Impact tech. BlackRock leads Zero Mass Water’s $50 million round… Urbint secures $20 million for worker and energy infrastructure safety software… Egypt’s Chefaa secures early funding for medicine delivery service… California edtech venture Blue Studios scores investment from Global Millennial Capital.

Low-carbon transition. Amazon’s $2 billion Climate Pledge Fund ups the ante… Energicity raises $3.3 million to develop solar microgrids in West Africa… Quidnet Energy secures $10 million for hydro-energy storage… Convergence funds the design of a clean-energy finance facility in the Philippines.

Returns on inclusion. Loud Capital raises $10 million Pride Fund for LGBTQ entrepreneurs… Refugee-powered food company Afia Foods closes $1 million… Billionaire investor Robert Smith launches nonprofit to relieve Black student debt.

Responsible fintech. Catalyst Fund announces new inclusive fintech cohort… Village Capital focuses European fintechs on financial health for vulnerable groups.

Frontier finance. Finland’s OP Corporate Bank raises €76 million for emerging markets impact fund.

COVID relief. New York City restaurant fund ties COVID relief to wage increases.

Retail investors. CoPeace raises $1.6 million to invest as an impact holding company.

The Week’s Talent

Backstage Capital’s Brittany Davis is promoted to general partner… Bamboo Capital Partners’ new board of directors for operations in Latin America includes Bamboo’s founder Jean-Philippe de Schrevel, as well as Victor Toledo, Rebecca Ruf, Carlos Braga and Camilo Zea… Jim Egan, CEO of BBC Global News, joins Media Development Investment Fund as chief investment officer. Egan will step down from MDIF’s board.

Anita Zaidi, a pediatric infectious disease physician, is named president of gender equity at the Bill & Melinda Gates Foundation… Kameale Christinia, ChargerHelp founder, joins the board of Women in Cleantech & Sustainability as Los Angeles co-chair… Nishad Parmar is named senior partner and chief investment officer at Loud Capital.

The Week’s Jobs

Water Innovation Accelerator seeks a president… IDB Invest is hiring an investment management officer in Washington, D.C… Venture capital firm Fifth Wall becomes a certified B Corp… Lumina Foundation is hiring a director of Lumina Impact Ventures in Indianapolis… The Global Impact Investing Network is looking for a director of finance and operations in New York… Prime Impact Fund seeks investment operations interns in Cambridge, Mass. or remote.

The European Commission calls for membership applications for its platform on sustainable finance… Mercy Corps Ventures seeks an advisor / program officer in Portland… NewSchools Venture Fund is recruiting an analyst for its diverse leaders strategy… The Public Interest Network is looking for Environment America Fellows.

Thank you for reading.

–June 26, 2020

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