TGIF, Agents of Impact!
🎧 Impact Briefing. In this week’s podcast, host Brian Walsh takes stock of two of the premier showcases for student talent in impact investing and sustainable finance (see Agents of Impact, below). As head of Liquidnet for Good, Walsh is a longtime backer of the Turner MIINT competition, which selected its winners last week. He chats with Bridges Fund Management’s Brian Trelstad about this year’s competition, and catches up with Emily Dinino from UCLA’s winning team. And Megan Kashner of the Kellogg School of Management at Northwestern recaps the Kellogg-Morgan Stanley Sustainable Investing Challenge, which also staged its finals last week. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you listen.
- Bring ImpactAlpha to your favorite school. ImpactAlpha provides free subscriptions to student teams in both competitions. More than two dozen policy and business schools, colleges and universities use ImpactAlpha across their programs to up-skill the next generation of talent. Email [email protected] to bring your school on board.
Clubhouse conversation. We’ll be on the drop-in audio app today to talk about the inflection points in climate finance (see No. 2, below), the week’s other headlines, and whatever’s on your mind, hosted by ImpactAlpha’s Lyneka Little. Find us at 9am PT / 12pm ET / 5pm London. Drop by.
The Week’s Big 6
1. The Reconstruction: Making the case for justice. Social scientist Tiffany Manuel is thinking hard about what it takes to “get people to lean forward on the hard stuff.” On the latest episode of The Reconstruction podcast series on ImpactAlpha, Manuel speaks with host Monique Aiken about “strategic case-making” for system change, and countering division and backlash (also watch Manuel talk about system change and impact data with Ecotone Analytics and SVT Group). Imagining the world of our children’s children helps establish a new narrative, Manuel says. “Paint the picture of what it looks like and say, ‘That future is totally possible, completely 1,000% possible.’” Think big.
- Daryn Dodson’s history lessons. Last week’s guest on The Reconstruction followed up with a guest post reflecting on “the echoes of history” (listen to, “The Reconstruction: Overcoming racial bias to optimize asset management for returns – and impact”). Dodson’s Illumen Capital puts fund managers through an immersive “impact experience” to engage with the history and ongoing realities of inequality and racial bias. “By connecting the dots of slavery, the period of racial lynching terror, Jim Crow and mass incarceration, we help investors begin to understand the history that led to the racial disparities seen across investing today,” writes Dodson. Op-ed.
- Ivy Jack walks the talk. Investing money alone isn’t enough to meet society’s challenges, says Jack, head of equity research at NorthStar Asset Management in Boston. In the latest edition of Walking the Talk, ImpactAlpha’s series with Confluence Philanthropy, Jack says she gladly pays her taxes and invests in democracy because the federal government has been essential to ensuring Black people’s freedom and rights. As a Black woman in the U.S., “owning what I own” is not simple or straightforward, she says. Being a values-aligned investor means having “a constant dialogue about what you value and how it is showing up in your life before even considering how it shows up in your portfolio.” Read on.
- The Reconstruction. In its first eight episodes, the podcast series has introduced people, projects and policies that center Blackness in the service of economic liberation for all. Find all the episodes on Spotify, Apple or Anchor and catch up on the rest of The Reconstruction on ImpactAlpha.
2. Climate’s clean trillion. Because of the dramatically falling costs of renewable energy, new clean energy projects are now cheaper than even existing fossil fuel plants. That’s the focus of Houston-based Energy Transition Ventures, which is launching a climate tech fund in the heart of Texas’ oil patch. BlackRock’s Larry Fink calls the low-carbon transition “one of the greatest investment opportunities over our lifetimes.” BlackRock followed up its $4.8 billion renewable energy fund by launching a decarbonization fund with a $600 million commitment from Singapore’s Temasek. With tailwinds from government green recovery spending, an inflection point in climate financing appears to have arrived. Read on.
- Climate investing in emerging markets. As energy-transition investments surged in advanced economies in 2020, they fell in equal proportion in emerging economies. The Climate Finance Leadership Initiative is zeroing in on climate-progressive policy making as a key to unlocking capital for climate adaptation and mitigation, starting with pilot programs in India and Indonesia. With the right mix of climate leadership, policy and private sector commitment, “a thriving market for clean technologies can emerge rapidly,” CFLI states in a new report. Dive in.
- Banking the transition. JPMorgan said it will target $2.5 trillion in sustainable financing by 2030. That includes $1 trillion, or $100 billion a year, for green initiatives such as clean energy. That should push green initiatives ahead of the bank’s financing of fossil fuel projects, which has averaged $63 billion a year even after the 2015 Paris Agreement. The other top fossil fuel financier, Citi, upped its sustainable financing commitments to $1 trillion by 2030. More.
3. Institutional Shift: Dairy waste, SPACs and the end of externalities (podcast). Infrastructure solutions for climate change and resilience have been a poor fit for venture capital investors. But such capital-intensive projects are a good fit for institutional portfolios and, especially, for special-purpose acquisition companies, or SPACs. In the latest installment of ImpactAlpha’s Institutional Shift podcast series, Equilibrium Capital’s Dave Chen breaks down the shift of capital into waste-to-energy solutions, high-tech greenhouses and other green infrastructure projects. Tune in.
4. How vocational schools and colleges are sharing tuition risk with students. Social Finance has raised $36 million for its “career impact bonds,” which help workers retrain for careers from diesel mechanics to computer coders. The mechanism borrows from “income-share agreements” deployed by a growing number of colleges and universities that are sharing the risks of tuition with their students. The University of Utah, for example, designed an income-share agreement program to allow students to pay tuition only once they graduate and are gainfully employed. In a guest post, Vemo Education’s Tonio DeSorrento says, “They aren’t just sharing risk, they’re reducing it, too.” Crack the books.
5. Sustainable snapshot. JPMorgan Chase last month launched a new Empower money market fund share class to support minority-owned and diverse-led financial institutions. At least ten firms now offer sustainable money market funds with investing options for values-based orientation, negative screening, and/or ESG integration, according to ImpactAlpha data partner Sustainable Research and Analysis. Collect all 10.
6. Systems-change investing. “Not just a few investors but the whole financial community needs to move beyond a portfolio focus to a focus on entire systems,” writes Bill Burckart, author (with Steve Lydenberg) of the new book, 21st Century Investing: Redirecting Financial Strategies to Drive Systems Change. The co-founders of The Investment Integration Project showcase investors like KL Felicitas Foundation, Prudential Global Investment Management and Heron Foundation that are addressing global systems challenges in their daily investing. Learn how.
The Week’s Agents of Impact
Students of impact. Women make up eight of nine graduate students on the winning teams at last week’s Turner MIINT competition and Kellogg-Morgan Stanley Sustainable Investing Challenge (they are: UCLA’s Christy Tsui, Emily Dinino, Katie Quilligan, Lucy Maybank and Morgan Owens, and, pictured above, Oxford’s Noah Law, Dawn Musil, Emilé Radyté and Annabella Wainer). The demographic disruption is a sign of how the new generation of impact investing talent is changing the face of finance (see, “Next-gen talent is the winner at MIINT competition and Sustainable Investing Challenge”). Students also are crowding impact investing courses and impact investing clubs and launching student-led funds. They’re even collaborating across campuses to apply their biz-school education to “the impact we want to make on the world,” says Dinino, a student at UCLA’s Anderson School of Management. “Not only extracurricular, but making it part of our careers.”
Outperforming on impact as well as financial returns requires a new profile. The ability to influence a diverse set of stakeholders, not just shareholders, is how new leaders are finding success. “It’s not just about the what of impact investing and the how of impact investing, but it’s also about the who of impact investing and what the field will look like over the next generation,” says Bridges Fund Management’s Brian Trelstad, a co-founder of the MIINT. “This generation of MBA students is going to come into their next roles wanting to bring their values with them,” says Kellogg School of Management’s Megan Kashner, who coordinates the Sustainable Investing Challenge, as well as the Impact and Sustainable Finance Faculty Consortium. Venture firms, corporations and consulting firms, Kashner says, need to be prepared for the wave of purpose-driven talent. Students “are optimistic, a little impatient, and ready.” – Dennis Price
The Week’s Dealflow
Agrifood tech. Ÿnsect acquires Protifarm to produce mealworms for human consumption… Hazel Technologies raises $70 million for packaging that curbs food spoilage… PeakBridge and EIT Food are launching a €30 million agrifood tech fund to seed European startups… Lever VC closes $46 million to invest in alternative protein ventures worldwide… Investors commit $25 million to expand lab-grown foods… AppHarvest acquires agricultural robotics maker Root AI… Icelandic private equity firm Freyja takes a 15% stake in Arctic char aquaculture venture Matorka
The Reconstruction. Black and woman-led Minwo scores seed funding to connect Black and Brown founders to capital and other resources… Founders First’s Kitty Fund makes micro-investments in “mompreneurs”… Wells Fargo is making equity investments in five Black-owned minority depository institutions… Black-owned hair care company Mielle Organics secures an undisclosed amount of capital from Berkshire Partners.
Low-carbon transition. Singapore’s Temasek and BlackRock team up as Decarbonization Partners… Ecosystem Integrity Fund invests $3.5 million in Rwanda’s Ampersand to electrify motorbikes… SHYFT Power Solutions raises $3.1 million to deliver affordable, clean energy in Nigeria… Battery Resources scores $20 million in Series B equity funding to process old batteries.
Financial inclusion. Uganda’s Numida secures $2.3 million to fill gaps in microfinance lending… Hatch raises $20 million to lower the cost of banking and credit for small businesses… Indian fintech Credflow secures $2.1 million to help small businesses manage cash flow… IFC backs FHipo to help Mexican families secure financing for affordable housing.
Health and wellbeing. South Africa’s Quro Medical raises $1.1 million for home healthcare… Uber, PayPal and Walgreens are launching an $11 million vaccination access fund with the Local Initiatives Support Corp.
Smallholder farmers. India’s agtech venture Samunnati acquires peer startup Kamatan to drive expansion across the country… AgDevCo is investing $3 million in Uzima Chicken Limited to provide smallholder farmers with baby chicks.
Innovative finance. PT Kandelia Alam and IDH will explore blended-finance solutions for sustainable landscape development in Indonesia through a grant from Convergence.
The Week’s Talent
Gary Gensler, former investment banker and head of the Commodity Futures Trading Commission, is confirmed as chair of the U.S. Securities and Exchange Commission… ThomasLloyd hires Alan Burnett, ex- of Manulife Asset Management, as a director overseeing wholesale clients in the U.K. and Ireland… Ingrid Holmes, ex- of Federated Hermes, is the new executive director of the UK’s Green Finance Institute… Karen Karniol-Tambour and Carsten Stendevad will serve as co-chief investment officers for hedge fund giant Bridgewater Associates’ new sustainable investing venture.
Nneka Uzoh, ex- of Elemental Excelerator and founder of Greentech Noir, joins Aligned Climate Capital as senior vice president… Tim Short, Benoit Allehaut and Benjamin Droz, ex- of Capital Dynamics, join KKR’s Global Infrastructure team to source energy transition investments in North America… Amee Parbhoo is promoted to managing director at Accion Venture Lab… Waymo’s Tekedra Mawakana, Stripe’s Claire Hughes Johnson, TaskRabbit’s Stacy Brown-Philpot and Confluent’s Erica Schultz join Operator Collective’s board of advisors… Taj Ahmad Eldridge is departing Los Angeles Cleantech Incubator to focus on his role as general partner at Include Venture Partners.
The Week’s Jobs
LACI seeks a senior director of investment relations… Genius Guild is hiring an analyst for its Greenhouse Fund… Adjuvant Capital is looking for an investment analyst in San Francisco… Marin Agricultural Land Trust is recruiting a director of people and community… Justice Funders seeks a U.S.-based co-director of leadership programs… The Urban Innovation Fund has an opening for an associate in San Francisco… New Ventures is hiring a venture capital analyst to support its Colombia-based program.
The Opportunity Finance Network seeks a chief strategy and operations officer in Washington, D.C… Climate for Capital has openings for a head of research integration and a head of climate funds research and evaluation… Finance in Motion is recruiting a senior officer of impact and sustainability in Frankfurt… Aligned Climate Capital is hiring an associate in L.A., New York or Washington, D.C… Athora Netherlands seeks a senior sustainability and impact analyst in Amsterdam.
CrossBoundary is looking for a head of domestic advisory in New York or Washington, D.C… New Island Capital Management is recruiting a vice president of real estate in San Francisco… SoftBank is hiring an analyst or associate for its $100 million Miami initiative… Climate Policy Initiative is looking for a manager of climate finance in New Delhi… The Libra Foundation seeks a knowledge and grants manager in San Francisco… Boutique investment firm Sail Ventures is hiring a senior impact and ESG specialist in The Hague.
That’s a wrap. Have a wonderful weekend.
– April 16, 2021