Hello ImpactAlpha readers!
A new consensus emerges around a more inclusive and sustainable economy…It’s always risky to call a tipping point, but the vibe this week among global financiers at the Milken Institute Global Conference is that it has become almost de rigueur to be “part of the solution” on issues like inequality, jobs, climate disruption and even global dislocation and migration. Skeptics may dismiss the talk, but follow the money: impact opportunities in the low-carbon economy, 21st century infrastructure, consumer goods and services for the global middle class and tech-driven solutions to education, health and food are the wealth-generating opportunities of our generation. When the markets get wise, capital can shift very quickly indeed. One data point: the big ticket-sizes of the back-to-back early investments by TPG’s Rise Fund.
…And a growing market adds infrastructure and intermediaries. Just this week, private investors flocked to the first two unsubsidized, S&P-rated bonds for community development, from The Reinvestment Fund and LISC, opening a new source of capital for investments in low-income communities. Calvert Foundation’s new Capital Aggregation initiative offers institutional investors a menu of off-grid solar, small-business finance and other fixed-income impact investments. And in the spirit of required blocking-and-tackling, Cambridge Associates and the GIIN dug in to produce benchmarks for impact investments in timber, real estate and infrastructure.
Are you keeping up? Test your knowledge of the impact investment landscape with this week’s Brief Quiz (lucky №13) from ImpactAlpha’s Jérôme Tagger:
Ten percent of what goes to emerging markets? Take The Brief Quiz № 13
#Dealflow: Follow the Money
Impact PLC to list $150 million impact investing trust on the London Stock Exchange. It will be the U.K.’s first publicly listed investment company to focus on impact investments in emerging markets. Impact PLC is seeking to raise $150 million to invest in 10 to 15 private equity impact funds based in low-income countries with average per capita incomes of less than $12,000 per year. It will focus on funds in agriculture, energy and healthcare, as well as short-term (24-months or less) impact and microfinance bonds. The aim is to begin investing within 18 months of the initial public offering next month and to generate roughly eight percent annual returns. The trust’s board includes Jean-Michel Severino of Investisseurs et Partenaires; Lisa Green Hall of Anthos Asset Management; Randall Kempner of the Aspen Network of Development Entrepreneurs and Sean Hurst of JPEL Private Equity.
OPIC invests $5 million in Early Dawn to finance women entrepreneurs in Myanmar. The Overseas Private Investment Corp.’s loan to Early Dawn Microfinance Co. will boost the firm’s lending to low-income women entrepreneurs. Early Dawn is a partnership of Save the Children, Accion, Triodos Bank, and Dutch development bank FMO and serves small businesses in poor parts of Yangon, Myanmar’s largest city. It has provided more than $12 million in loans to 50,000 borrowers since 2002. OPIC’s capital aims to help Dawn reach 150,000 borrowers by 2019. The U.S. agency has invested in more than 200 microfinance institutions worldwide. Myanmar has the lowest level of access to financial services in its region of Asia; only 23 percent of adults have a bank account, according to the IMF and World Bank.
Queensland social impact bond to reunite foster children and their families. The Australian state is raising A$6 million ($4.45 million) through its first social impact bond in order to help reconnect foster care children with their families. The program aims to get 560 children back in their family homes by providing support, including group and individual therapy, to parents. Investors will get paid based on the percentage of families reunited within six months of the children entering foster care. The state anticipates saving A$58 million over five years. Queensland now spends $50,000 per foster child per year, and only 16 percent of kids go back to their family homes. The bond was developed by Social Ventures Australia, which this year raised a $9 million social impact bond to fight homelessness in Adelaide. Social Ventures is looking to raise capital from about 40 investors, and is offering 7.5 percent for investments above A$50,000 ($37,000).
India’s Impact Guru partners with Global Giving for international crowdfunding. Indian crowdfunding platform Impact Guru has partnered with GlobalGiving to attract more U.S. and U.K.-based donors. The partnership with Washington D.C.-based GlobalGiving allows overseas donors to support Indian organizations and claim charitable-giving tax incentives in their own countries. Impact Guru’s CEO Piyush Jain said the strategy will make it easier for the Indian diaspora to give back home. India has the largest diaspora in the world, according to the United Nations, with 16 million people living outside of the country.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
M-KOPA connects 500,000th East African home to off-grid solar. For about $200, paid in daily installments of 50 cents, M-KOPA customers can replace dirty and expensive kerosene with clean sun-fueled energy. That enables children to do their homework, shops to stay open at night, and individuals to save the cost of charging their mobile phones at the village kiosk. The five-year-old startup says it has now connected a half-million East African households to off-grid solar systems. This translates to 62.5 million hours of kerosene-free lighting per month and savings of more than 600,000 tons of carbon dioxide over four years, the company says. More broadly, M-KOPA is pioneering asset-backed lending to the poor (see ImpactAlpha’s, “Banking on the Poor”). Of the 250,000 Kenyan credit scores the company has reported, 92 percent are positive (loans have been repaid or in good standing). M-KOPA is backed by bold-faced impact investors, including Al Gore’s Generation Investment Management, Grey Ghost Ventures, LGT Venture Philanthropy, the Gates Foundation, Richard Branson, Jean and Steve Case, Lundin Foundation, Treehouse Investments, and the Blue Haven Initiative.
Impact investing and venture philanthropy converge in Bangkok at Asian Venture Philanthropy Network conference. Social finance is a global phenomenon. During a three-day confab from June 7–9, the Asian Venture Philanthropy Network will dig into new approaches in education, health, livelihoods and the environment in Asia. The more than 600 participants from 40 countries at “Collaborating for Impact,” will explore inclusive economies, women’s empowerment, corporate impact, social innovation and technology, the continuum of capital and other themes. ImpactAlpha is a media partner for the event. You can register here.
Are we reaching Peak Hospital? The hospital of the future will be “a bunch of people sitting in a room full of screens and phones,” according to Toby Cosgrove, who heads the Cleveland Clinic. The hospital group is already experimenting with such a vision. One of its units hosts a bunker full of screens and phones that monitors 150 intensive-care unit patients in hospital beds at other facilities. Doctors, nurses, and technicians track patients’ status and progress and alert the on-site nurses when a patient needs attention.
Hospitals will function like air-traffic control towers, where everything but the most serious medical cases are monitored and even treated remotely. Even, eventually, invasive treatments like dialysis. With telemedicine, artificial intelligence, and wearable health devices, healthcare already is heading in that direction (see, “Future of Medicine: Healthcare in Your Hand”). Many people will receive most of the care they need without leaving home or setting foot inside one of today’s brick-and-mortar hospitals.
“We have reached the peak of bringing patients to the healing centres,” says Samuel Smits of Gupta Strategists, a health care strategy firm in the Netherlands. “We are on the brink of bringing the healing to patients.”
Onward! Please send any news and comments to [email protected].