The Brief | May 1, 2024

The Brief: Foundation investments in health equity through a diversity lens

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Greetings Agents of Impact!

In today’s Brief:

  • Investing in health equity at the Robert Wood Johnson and California Wellness foundations
  • Sustainable forestry in Latin America
  • Curbing food waste in Kenya

Foundations are putting racial equity at the center of impact investments in health. The end goal: Improve health and wellness in underserved communities. The strategy: Invest in and through the people with lived experiences in those communities. The California Wellness Foundation has put a diversity, equity and inclusion lens on its commitment to invest 100% of its $1 billion endowment to further its health and wellness mission. With its $200 million allocation for impact investments, the Robert Wood Johnson Foundation is addressing health equity by taking on racial injustices in community development finance. A pair of guest posts unpack strategies for improving the nation’s health and wellness by addressing racial inequity in the capital markets.

👩🏽‍🦱🧑🏼‍🦱👨🏾‍🦲👩🏻‍ Investing in diverse managers at Cal Wellness. Gender and racially diverse investment managers are central to the mission of California Wellness Foundation. Such managers can avoid groupthink and identify overlooked opportunities, argues Cal Wellness’ Rochelle Witharana. They also help the foundation eliminate “systemic barriers that prevent access to healthcare, education, employment and safety,” she says. To shift the system, Cal Wellness is shifting capital to diverse fund managers, including Twine Ventures and Chingona Ventures, two first-time funds led by women of color that invest in diverse founders. The more established Rethink Impact invests in female and non-binary leaders who are using technology to solve big problems. Arc Capital Partners is a real estate investment manager that targets markets with high barriers to entry using a lens of diversity and inclusion. “We believe it is our fiduciary duty to consider diversity when selecting investment managers to attain our financial goals and further our mission,” writes Witharana.

🌊 Changing the flow of capital at the Robert Wood Johnson Foundation. Rural and Indigenous communities have experienced extraction of jobs and natural resources, a historical lack of investment and vast health and economic disparities, writes RWJF’s Zoila Jennings. “Long-term, low-interest-rate financing allows communities to be innovative, opportunistic and resilient.” In Appalachia, RWJF is backing the Invest Appalachia Fund to provide real estate and small business loans in clean energy, community health and family farming. A loan to the Federation of Appalachian Housing Enterprises aims to expand homeownership through the use of second mortgages to bridge downpayment gaps. A program-related loan to South Dakota-based Four Bands Community Fund seeks to increase access to capital and credit in Native communities (see, “Mobilizing capital in Indian Country”). The foundation also provides general operating support to organizations that are bringing in leaders proximate to the communities they serve, including CommunityWorks Carolina, Wind River Development Fund, Urban Redevelopment Fund of Pittsburgh, FirstLight Federal Credit Union and Philadelphia Industrial Corps. Writes Jennings, “Doing our part to dismantle structural racism in impact investing is critical to realizing a nation where health is not a privilege for some, but a right for everyone.” 

  • See you at Mission Investors Exchange. Join Witherana for “Investing in diverse manager strategies,” and RWJF’s Ruth Gao for “Activating for equity in a post affirmative-action era,” at MIE’s 2024 National Conference in Los Angeles, May 7-9. ImpactAlpha is MIE’s media partner. Register today.

Dealflow: Natural Capital

BTG Pactual’s Timberland Investment Group secures $1.2 billion for timberland in Latin America. Timberland Investment Group, part of Brazilian bank BTG Pactual, closed its inaugural Latin America timberland fund with $860 million in 2015. The newest fund, launched in 2020, raised $1.2 billion to invest in mature timberland assets in Chile, Uruguay and Brazil. Latin America, said BTG’s Gerrity Lansing, has “unique, secular attributes including ideal growing conditions and strong domestic markets for many forest products.” The group formed a partnership with The Nature Conservancy in 2021 to bridge the gap between demand from institutional investors for sustainable forestry investments and the supply of projects. The new fund has invested in five timberland assets that TIG will manage long-term. TIG manages a total of three million acres of timberland in the US and Latin America.

  • Conservation finance. TIG was tapped by Apple’s Restore Fund to restore degraded pasturelands in South America for carbon removal credits. That fund, which also partners with Symbiosis and Arbaro Advisors, has raised more than $280 million. With Conservation International, TIG is working on a $1 billion, five-year investment strategy for forest protection and restoration in Latin America.
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Renew Capital invests in Farm to Feed to curb food waste in Kenya. “Imperfect produce” startups that salvage fresh foods destined for the landfill can be found throughout the US and Europe. Nairobi-based Farm to Feed is adapting the model to serve smallholder farmers and urban households in Kenya. The enterprise got its start by partnering with relief organizations to salvage produce from farmers to distribute to food-insecure communities in Kenya. It now operates an online marketplace for imperfect but edible produce. The startup says it has salvaged nearly two million pounds of fresh produce from 800 farmers, supplementing their income by more than $200,000. Ethiopia-based Renew Capital made an equity investment in Farm to Feed to build out its platform for tracking food loss and generating carbon credits. Farm to Feed is also backed by BFA Global’s Catalyst Fund and philanthropic funders. 

  • Funding food circularity. Poor access to markets and unreliable cold chains mean annual food losses in Africa amount to $4 billion per year; the volume could feed 48 million people. Curbing waste is urgent as climate change jeopardizes food security on the continent. “Our goal is to transform the way food is valued and utilized in Kenya,” said Farm to Feed’s Claire van Enk. “We’re dedicated to reducing the environmental footprint of agriculture, boosting farmer incomes, and making nutritious food more accessible and affordable for all.”
  • Dig in.

Dealflow overflow. Investment news crossing our desks:

  • Parametric insurance provider Arbol raised $60 million in Series B funding, co-led by Giant and Opera Tech Ventures. (Arbol)
  • GroundGame.Health, a Tampa-based company that partners with local organizations to close healthcare gaps in hard-to-reach communities, clinched $17 million. GroundGame will merge with SameSky Health to better address health-related social needs. (GroundGame)
  • Chemonics International and Talino Venture Studios launched and seed-funded Higala to provide instant digital payment services to underbanked consumers and merchants in the Philippines. (Chemonics)
  • AgDevCo acquired a minority equity stake in Agris, a Kenyan sustainable producer and distributor of fruits and vegetables in East Africa. (Agris)

Overheard: African Private Capital Association

Catalyzing local investment and liquidity models to meet Africa’s sustainable finance needs. This past month’s torrential flooding in Kenya, heatwaves in West Africa and drought in Southern Africa show a continent on the frontlines of climate change. Extreme weather events are exacerbating Africa’s sustainable development finance gap of more than $200 billion a year. “It’s crucial to reassess traditional investment strategies,” Zain Latiff of small business private lender TLG Capital said at last week’s African Private Capital Association conference in Johannesburg. ImpactAlpha contributor Lucy Ngige rounded up the highlights:

  • Liquidity, liquidity, liquidity. Fund managers like TLG are making it their job to educate investors about Africa’s $330 million annual small business finance opportunity. “The answer to the liquidity problem lies with the banks,” Latiff says. TLG engages with commercial banks “so that when we exit in three, five or seven years, there are natural exit routes.” On the equity side, British International Investment is building an impact secondaries market to enable limited partners to sell long-held stakes in impact funds and recycle their capital in Africa and other emerging markets. BII’s John Owers issued a call to action for “buyers who have a clear strategic interest in doing this.”
  • Catalyzing local capital. African pension funds, banks and insurance companies are increasingly investing in local fund managers, including Injaro Investments in Ghana and Acre Impact Capital in Mauritius. More local institutional investors “understand the impact of what large scale investment can do and want to partner with teams on the ground to deliver that,” said Aminu Umar-Sadiq of the Nigeria Sovereign Investment Authority. The authority, which manages Nigeria’s $2.5 billion sovereign wealth fund, has attracted local insurance companies and pension funds to its infrastructure and economic stabilization funds. Also in Nigeria, ARM-Harith Infrastructure Investment is raising a $250 million climate-focused fund to “mobilize international capital and domestic pension savings” to meet Africa’s need for equity financing for infrastructure projects.
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Agents of Impact: Follow the Talent

Opportunity Finance Network is hiring a senior vice president of membership in the Baltimore-Washington area… The American Heart Association seeks a vice president and managing director for its social impact fund… Shareholder Rights Groups seeks a remote project director… CrossBoundary Group is looking for an associate or senior associate for the Caribbean in Kingston, Jamaica. 

Justice Climate Fund has several openings for launch team members, including a head of its Clean Communities Investment Accelerator programs, an Environmental Protection Agency liaison… Climate Impact Partners is looking for a head of carbon project delivery in London… Also in London, Tierra-Foods is hiring an associate… Renew Capital seeks interns in Nairobi and in Kampala, Uganda.

The Arc Fund, an initiative of CultureSource, AAACF and the Ford and Kresge foundations, is accepting applications from creative and culture workers of color in Southeast Michigan… US SIF Sustainable Investment Forum is holding its US SIF Forum in Chicago from June 24-26… Sightline Climate is hosting a webinar on scaling first-of-a-kind, or “FOAK,” climate tech deployments, Tuesday, May 7.   

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– May 1, 2024