ImpactAlpha Open: Financing better buyouts for employee owners

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In this week’s Open:

Financing better buyouts for employee owners
Iran war speeds Asia’s pivot away from oil and gas
Spotlight: Impaqto Capital launches its Amazon Andes Fund
Advisors Corner: Impact by another name

Let’s jump in. – Dennis Price

Must-Reads on ImpactAlpha

Better financing can make employee ownership a game-changer for workers. Was KKR’s $4.75 billion sale of CoolIT Systems, announced last week, good for workers? “That depends on who you ask,” writes ImpactAlpha contributor Antony Bugg-Levine. Many employees of Calgary-based CoolIT seemed happy, judging from the made-for-media moment when they opened their pay envelopes. In the impact investing community, the reaction was more complicated. See why.
War in the Middle East fuels the transition away from oil and gas in Asia. An unexpected war in 2022 forced Europe to confront its energy insecurity and hit the accelerator on its green transition. With the war in Iran, Asia is now in the same position:
- Electric kitchens. In India, a shortage of canisters and long lines at refuelling stations have spurred many households to switch to electric cooktops, reports ImpactAlpha contributor Shefali Anand. “I was scared that if I didn’t get it, I would have no options,” Anju Singh, a housemaid in the Delhi suburb of Noida, told Anand. Keep reading.
- Bangladesh’s climate opportunity. Only about 5% of Bangladesh’s energy needs are met with renewable sources. The war has forced the country’s month-old government to institute short-term fuel rationing to prevent panic buying. Longer-term, a number of green incentive programs make Bangladesh attractive for international investors seeking climate investment opportunities in the Global South, writes ImpactAlpha contributing editor Marilyn Waite. Take a closer look.
Leaning into outcomes, impact fund managers move away from the VC model. The typical 10-year, “two and 20” fund model has been declared obsolete many times, especially among impact investors, for whom the standard private equity or venture capital fund structure is often particularly ill-suited. And yet, it persists. Now, market conditions and more clear-eyed assessments of value-creation strategies are combining to support another wave of fit-for-purpose structures, reports Eric Stein. Learn more.

Agents of Impact

Minderoo Foundation tapped Andrew Lill, previously with Legalsuper, as chief investment officer, effective in July.
Nia Hope Bess has been promoted to head of social impact integration at JPMorganChase.
Mike Mbari, previously the head of investments at Co-creation HUB, joined Draper Richards Kaplan Foundation as investment principal, focusing on Africa.

Advisors’ Corner

💬 The conversation advisors think they aren’t having: Impact by another name

The question is not whether clients are interested in impact investing. The question is whether advisors are listening for it. “When clients talk about climate, community development, ethical considerations or legacy, they are often expressing a desire for their investments to reflect their values,” CapShift’s Ben Kramer writes in a guest post. “Advisors who can translate those priorities into thoughtful portfolio strategies will be better positioned to serve clients, and to retain them. Increasingly, the most meaningful investment conversations are not only about returns but about purpose.”

The Week’s Spotlight

🌿 Impaqto Capital launches Amazon Andes Fund to back processors and exporters

Quito-based Impaqto Capital spent the last five years proving out custom financing solutions for impact companies across the Andean region. Now the firm is taking that approach deeper into the Amazon. “The closer to the end buyer, the more margin there is to share,” Impaqto’s Michelle Arévalo-Carpenter told ImpactAlpha. “Smallholder farmers capture very small value from really hard work. We’re now solving for that.”

Risks and rewards. In a video interview, Impaqto’s Arévalo-Carpenter and Justin Schwartz discuss the realities of investing for impact in South America’s smaller markets.
Get the deal.

Get in the Game

💼 Step up

Boston Impact Initiative seeks a director of development and investor relations in Boston.
MCE Social Capital is looking for an associate investment manager in Bogota.
ERM is hiring a consultant or senior consultant for private markets value creation in New York.

🤝 Meet up

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