The Calvert Foundation, distinguished by its inception of its innovative community investment (CI) note, is launching a new line of business called Capital Aggregation to pool capital using syndications to enable impact investment at scale.
Calvert expects to originate, structure, administer and participate in transactions, the announcement said. Transactions will target deals in the range of $10 million to $50 million.
Significance – Its Potential
The new structure affords Calvert the ability to meet the needs of the growing market:
- Growth stage enterprises that need more larger-sized funding but are facing increased transaction cost hurdles
- Impact investors, accredited and institutional, that are looking to diversify their risk / return portfolio holdings.
Calvert hopes to increase the supply of new capital sources – already in the past 24 months, Calvert has identified 50 investors who are interested in Capital Aggregation.
The new structure is also rare and one-of-a-kind, according to David Bank at Impact Alpha, typically seen in legacy financial markets. Calvert’s move could stimulate similar such syndication structures in other organizations in the future.
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Ms. Pryce continued: “We are encouraged by the exciting growth we see in interest in impact investing from financial institutions, foundations, family offices and other investors, but also see an increased focus on niche portfolio creation rather than in investments that meet market demand.
We know that players active in fixed-income markets have the capacity to do enormous good, and we believe that by pooling investor interest and dollars, our Capital Aggregation business can accelerate capital flows to the communities we serve to maximize our collective impact.”
Sources: Calvert Foundation, Impact Alpha
