Wednesday, May 20, 2026

Take the Long View with Trump, the Threshold Group advises

By
Gino Baltazar, MS Finance
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Ron Albahary, CFA - Threshold Group

Leading Seattle and Philadelphia asset management firm the Threshold Group advises taking the long-term view and pursuing economic revitalization approaches in the new US administration of Trump.

***

While many in the impact investing community have been decrying the advent of Donald Trump as our 45th President, we have taken a few days to reflect on what this means for the impact investing sector. Many have expressed their expected gloom and dismay at the President-elect’s position on issues that impact investors hold so dear – including women’s rights or climate change to name a few.

So we asked ourselves this question: what are the potential implications of this election outcome on the sector of impact investing? And, what can we do? While many questions remain unanswered regarding how the regulatory environment might affect progress on environmental and social issues, we feel confident in proposing two general approaches for impact investors to consider: local economic revitalization and taking the long-term view.

Source: Threshold Group

Why Bill Clinton helped a 33-year-old build a $1B firm

By
Gino Baltazar, MS Finance
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Why Bill Clinton helped a 33-year-old build a $1bn firm

Why was former US President Clinton so impressed with a 33-year old South African businessman he had only recently met?  It was the nature of his profit-with-purpose venture.

Andy Kuper had ambitious plans to help transform the lives of hundreds of millions of people in the developing world, to help pull them out of poverty.

And instead of being a charity or non-profit organisation, Leapfrog Investments planned to be very much profit-making and offer its investors a decent rate of return. The idea was to make globalisation and capitalism work for the world’s poorest people.

After a very slow start, the business today has more than $1B (£800M) of funds on its books. It currently invests in 16 companies across 22 countries in Africa and Asia that have a combined 100,000 employees and serve 91 million people.

Companies that Leapfrog invests in and helps run include All Life, a South African insurance firm that gives low cost cover to people with HIV, Kenyan pharmacy chain Goodlife, and India’s Mahindra Insurance Brokers. Andy says that Leapfrog helps the firms see revenues grow by an average 43% per year.

Source: BBC

Gates Foundation Announces a New Coalition to fight Epidemics

By
Gino Baltazar, MS Finance
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Bill Gates of the Gates Foundation

In Davos this past week at the World Economic Forum, a global coalition called CEPI was to help fight outbreaks of diseases around the planet.  In the announcement, Bill Gates former founder of Microsoft, calls for a new system for catalyzing activity to develop vaccines against epidemic threats.

Microsoft founder Bill Gates announced he has launched The Coalition for Epidemic Preparedness Innovations (CEPI) through the Bill and Melinda Gates Foundation.

So far, CEPI has an initial investment of $460 million from private, public and philanthropic organizations. But others are willing to help. Norway plans to invest around $120 million in the initial 5 years, Japan will invest $25 million a year for a total of $125 million, and Germany will initially commit $10.6 million.

CEPI is backed by major pharmaceutical corporations, the World Health Organization and Médecins Sans Frontières / Doctors Without Borders, as well as philanthropies and leading academic vaccine research groups.

Source: CEPI

Impact Investing Would Improve Budgets And Lives in Australia

By
Gino Baltazar, MS Finance
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Dr Jim Chalmers MP

Jim Chalmers, Federal Labor Member for Rankin, Shadow Minister for Finance in Australia, argues the need for impact investing in Australia, citing the successes of initial forays in the UK and US.

***

A departmental report released by the former Labor Government in 2013 estimated the market in Australia would reach $32 billion in a decade. But that level of investment is likely still a long way off for a couple of reasons.

There’s a misconception that impact investing generates below-market returns, because sometimes lower financial returns are accepted in exchange for social outcomes. There’s also reluctance from superannuation funds and major investors to get involved given projects are generally targeted and small-scale.

Yet there is still an appetite among some businesses wanting to counter increasing scrutiny of their investments, develop their social licence, or to manage financial risks that arise from social or environmental problems. Some major corporations have turned to green bonds, to help finance renewable energy projects, as a way to complement investments in coal.

This isn’t about replacing Government investment. It’s about supplementing it.

2017 Predictions on Trends and Sustainability

By
Gino Baltazar, MS Finance
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TH-Think2017

TH Real Estate has issued its latest research report “THINK 2017: Five things you should know” which highlights five areas of focus for future real estate investment: big picture trends, cities to watch, leading sub-sectors, technology trends and sustainability.

Among key specific trends cited by the research: rise of green bonds, impact of Brexit, driverless cars and smart cities.

***
1 – Big picture: Geo-political risk, burden of debt in countries and monetary policy are among the broad trends that will impact global investment and outline expectations for another year of transformation, with political disruption and globalization continuing to take center stage.

2 – Cities to watch: Washington DC, Hongkong, San Francisco, Berlin and London are expected to undergo significant changes in the coming year are identified, as are specific factors that will impact them – for better or worse. Identifying and analysing cities poised for long-term growth is becoming more critical as this approach is overtaking country-level investing. Every city is impacted by unique, long-term trends that impact risk, diversification, pricing, volatility and returns.

3 –Leading sub-sectors: Data storage, outlet malls, co-working space and other niche, or ‘structural,’ sectors are considered, as interest in real estate alternatives continues to gain momentum in institutional investor portfolios. These sectors can offer performance, attractive yield profiles and liquidity and align investors with the megatrends shaping TH Real Estate’s Tomorrow’s World investment philosophy.

4 – Technology: Technology impacts all real estate sectors, but the retail, logistics and office sectors are likely to see the greatest change as driverless cars, online shopping and open source data platforms become mainstream. Furthermore, the PropTech movement is creating efficiencies across the critical services that are used by the real estate industry, whether from the transaction, asset management or property management perspective.

5 – Sustainability: Lastly, sustainability remains a critical consideration for real estate investment and is poised to play a broader role in years to come. A focus on sustainable factors can distinguish growth opportunities, while minimizing the risk of obsolescence within a portfolio. The report highlights the focus on science-based carbon reduction targets and the increased emphasis on the health and well-being of individuals who interact with properties.

Abigail Dean, Global Head of Sustainability, said: “Monitoring these sustainability trends in 2017 and beyond is crucial to help us anticipate and respond to changes in the investment market, to mitigate risk, and to protect and create long-term value. We also anticipate impacts on occupier demand, legislative and fiscal regimes, client expectations and energy supply.”

Source: TH Real Estate

Transitioning Your Career to Impact Investing

By
Gino Baltazar, MS Finance
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Shannon Houde

In a short but good read, Shannon Houde, an international career advisor, suggests three tips to one aspiring London-based professional after growing disillusioned with her career.

About Shannon Houde

Ms. Houde is the founder of Walk of Life Consulting, the first international career advisory business focused solely on the sustainability, social impact, international development and Corporate Responsibility (CR) fields.

Previously she worked as a hiring manager, a business coach and a CR consultant for Deloitte, Corporate Citizenship, Barclays, Adobe and WWF.

***

Dear Shannon,

I’ve been with a fund management firm in London for the past five years since graduating from a master’s program. While I enjoy my job function and the day-to-day buzz of being in “The City,” I’m becoming increasingly disillusioned with the purpose of my work. I think I’ve fallen out of love with making money. I took a three-month sabbatical last year to volunteer in East Africa and loved it. While I don’t think I want to change careers completely and work in international development, I would like to try something new. Any ideas?

It is not hard to see the appeal of working in the sector.  More than any in the previous generation, millenials in particular, are investing and increasingly working in organizations that prioritize the greater good, according to a recent survey.  The field is growing, evidenced by recent study by the Global Impact Invest Network (GIIN) that impact investment assets under management (AUM) grew 18% to nearly $36B  from $25B in 2013.

Shannon Houde’s tips include getting getting up to speed, getting connected and getting specific, good advise as there is plenty to digest in the field.

  1. Getting up to speed

Impact investing is evolving rapidly and becoming increasingly diverse. As a new player in this field, you need to appreciate the nuances. This means doing your homework to fully understand the approaches, structure and specialties within the sector.

2. Getting connected

Organizational and business success rests on the strength of your relationships: “Strong relationships are based on trust,” she said. “Personal finance is often a private and intimate matter that requires wealth advisors to not only be skillful in financial management, but also trustworthy, to uphold their fiduciary duty.” This applies to impact investing as well.

3. Getting specific.

Are your passions in the developing world or closer to home? In environmental issues such as water, biodiversity and energy or more on the social side of the fence in health, gender or education? Get specific if you want to make maximum impact.

In another article, Brian DeChesare, founder of Mergers and Acquisitions, interviews another professional based in Hongkong suggests cold-calling or cold-emailing people in organizations related to impact investing and volunteering at events hosted by foundations.

Q: So you quit abruptly and then started looking for something that would interest you… what was your first step?

A: I had heard about companies that invest in search of both social good and profit, so I started learning what I could about them.

This is a VERY small and personal industry, so I started cold emailing people at organizations related to “impact investing” here, and volunteered to organize conferences such as the one that the Rockefeller Foundation hosts.

One thing to note is that the field while small in AUM compared to conventional investing can actually be quite wide when viewed from the lens of breadth of variety of organizations participating, short of yet fully operating, in the space.

Outside of the traditional big-name investment funds such as the star-studded Rise Fund, these classes of ” impact investments” may be in the form of say a social impact bond, or the US government’s Social Innovation Fund, or an New Markets Tax Credit based project, or even a small microfinance development program outside of the US.

Be Inspired Some More -> Greenbiz, Mergers & Acquisitions

 

Continuing Microfinance’s momentum

By
Gino Baltazar, MS Finance
-

NextBillion this January has started a series of thought-provoking articles on the theme of microfinance – which is very broadly a vision for the provision of financial services to low-income people through financial inclusion.  It imagines a world where low-income households in all countries have access to affordable and high-quality financial services – savings, insurance, payments and remittances – to start small businesses, pursue advanced education, build wealth, stabilize lives and hedge against uncertain futures.  It is closely related to microcredit – which are very small loans to low-income, unsalaried borrowers with almost no collateral.

According to a World Bank report, microfinance has built a solid track record as a critical tool in the fight against poverty and has reached 195 million borrowers in the last 20 years.  Yet microfinance still reaches less than 20 percent of its potential market among the world’s three billion or more poor.

Timothy Ogden’s posts on NextBillion argues the case for continued social investment in microfinance, despite a recently published paper suggesting that impacts from various programs have been modest.

Curated via NextBillion, which was written by Timothy Ogden, a managing director of the Financial Access Initiative at NYU-Wagner.

The case for the status quo in microcredit – continued social investment and expansion with efforts to develop operational efficiencies and ensure client protection – is quite strong based on the findings of this research, especially if you value the extension of formal financial services to poor women. Admittedly, microcredit is not going to compete with the cost-effectiveness calculations for distributing bednets or deworming pills in areas with high prevalence of malaria and/or worms, but it doesn’t take much benefit to justify cost-effectiveness in comparison to most development interventions when your cost is less than $30 per person per year.

But there is also a strong case against the status quo: Surely we can do better than the current state of the art in microcredit. Understandably the impact research has captured people’s attention, but there has been a great deal of research over many years that focused less on impact and more on operational questions in the delivery of microcredit, such as: What drives repayment? What contract terms drive what sorts of behavior among borrowers? Why is take-up of microcredit so low? Why aren’t microenterprises growing? This rich body of research provides clear paths for innovation in microcredit that could boost impact. And again, it wouldn’t take much of a boost to dramatically improve cost-effectiveness estimates.

More…

TPG’s new $2B Rise Fund seeks to deliver impact at scale

By
Gino Baltazar, MS Finance
-

Both the size and target of TPG’s new and impacting Rise Fund are unprecedented.

The fund, $1B when first announced has since grown to $2B, and is a market-mover, with investments in countries like Myanmar to improve the poor country’s telecom infrastructure and India to two startups that plan to make it easier for micro and small business to make loans and to make financial products more available to rural farmers.

Its board members, all of whom are investors, are big names: Bono, the lead singer of U2; Jeff Skoll, the first employee of eBay, who now runs Participant Media; Laurene Powell Jobs, wife of the late Steve Jobs.

The stakes are high – two pension funds and a sovereign wealth funds are said to have committed nine-figure sums.

***

A $1 billion kitty is unprecedented in the impact investing universe. Given TPG Growth’s interest in emerging markets, it would not be unexpected for a sizeable chunk of that capital to flow into India and the larger Asian region. The allocation of such substantial resources specifically for impact businesses is without doubt a huge leg-up for a sector that has been starved for funds. Given TPG’s growth investments focus, the Rise Fund could well become an important source for the much-needed follow-on growth capital that impact businesses generally find hard to access from conventional private equity investors.

However, that will depend on the kind of businesses the Rise Fund plans to back as part of its impact agenda. Investments from the fund, which will be overseen by McGlashan, are likely to be on the lines of TPG Growth’s $40 million bet on Myanmar-based telecom towers company Apollo Towers in late 2014. The deal represented the first major global private equity bet on Myanmar after the country emerged from military rule.

A further indication of the kind of deals it may pursue is its partnership with impact investor Elevar Equity for the Rise Fund. Elevar, which has put a little over $160 million to work in 24 companies across the world, including in India, targets businesses that deliver services to underserved rural and urban consumers. Its recent investments include Indifi, a platform that makes it easier for micro and small businesses to access loans, and Samunnati, a company that makes financial products available to small and marginal farmers and other micro-entrepreneurs in the agriculture sector.

In addition, the fund’s high-profile board members and TPG’s professional staff are being held accountable for the performance of the fund, which it had developed rigorously with Bridgespan, a consulting group.

Bridgespan’s metrics for Rise could become a model for other investment firms if they prove successful, especially in a global political climate that is rethinking its capitalistic system.

“Capitalism is going up on trial, and I think that it’s clear that putting profit before people is a nonsustainable business model,” Bono said. “I think giving those two equal time is the way forward, and I think that in the present climate, we need to rethink, reimagine what it is. It’s not that capitalism is immoral; it’s amoral. And it’s a better servant than master.”

Sources: Deal Street Asia by Snidha Segupta, a contributing writer based in India, Andrew Sorkin at the New York Times and David Bank at ImpactAlpha.

David Plouffe Leaving Uber for Chan Zuckerberg Initiative

By
Gino Baltazar, MS Finance
-

David Plouffe, President Obama’s talented manager of his historic presidential 2008 campaign, is leaving Uber to join the $45B Chan Zuckerberg Initiative.

CZI which was founded by Facebook chief Mark Zuckerberg and his wife, Dr. Priscilla Chan, aims to cure all diseases within the next century. David Plouff served as a White House advisor until 2013 and joined Uber in 2014 as SVP of policy and strategy.

***

Plouffe is no stranger to working at the nexus of policy and philanthropy: He has served as a board member of the Obama foundation and was a campaign manager for President Barack Obama. The Washington Post reported in May of last year that Plouffe would move from his operational vice president role to more of an advisory role at Uber.

The Chan Zuckerberg Initiative is part of Zuckerberg’s push, along with his wife, to give most of his Facebook shares away to causes that “advance human potential,” like providing personalized education to everyone and curing all diseases within the next 100 years.

So far, the Chan Zuckerberg Initiative has led a $24 million series B investment for Andela, which helps train and place African engineers with tech companies, a $50 million investment in Indian video learning startup Byju, and $600 million of the funds towards building a “Biohub” building where researchers at Stanford University, University of Calfornia, Berkeley and University of California, San Francisco will work together to understand and treat disease.

Source: CNBC, by , a CNBC News Associate covering technology and breaking business news.

Impact Investing 2016 Roundup – Notable Year

By
Gino Baltazar, MS Finance
-

As a turbulent 2016 makes way for a hopeful 2017, it is worth noting a number of trends, news and events in a space that is still growing but rapidly maturing.

Impact Investing AUM – GIIN
  • Innovative social enterprise growth is occurring in unexpected places like in Cambodia where Iron Fish is developed to aid iron-deficiency and in Chile, where Bureo recycles fishing nets to make skateboards.  Both were started by young millenials who are leveraging corporate experiences to bring heft to their fledgeling social startups. (Forbes)
  • Social enterprises are increasingly adopting a set of practices to better measure their overall impact, using tools like the United Nation SDGs, with is a set of 17 global Sustainable Development Goals such as “no poverty,” “zero hunger,” and “good health”  and/or B-Corp certification, recently acknowledged by the Case Foundation as a game-changer influencer in impact investing. (Forbes)
  • Tech is joining the impact investment party, in spite of recent controversies including fake news on social platforms (e.g. Trump election), account security breaches (e.g. Yahoo) and hacking (e.g. Russia’s alleged incursions in US elections). In June of 2016, 700 entrepreneurs and innovators tackling social or environmental challenges came to Silicon Valley, for the seventh Global Entrepreneurship Summit, sponsored by the U.S. State Department, in a clear sign that tech venture is looking beyond the Valley and its apps to make impact.  Non-profit Slush’s December event in Helsinki was attended by over 2,300 startups and 1,100 investors. (Impact Alpha)
  • FinTech’s social impact is expected to get stronger. FinTech innovators are increasingly solving social and economic problems by leveraging emerging technologies like Blockchain, Artificial Intelligence or Big Data and creating platforms to enable say, Robo Advisor platforms like San Francisco-based Grow Invest or the underbanked to participate fully financially or economically as BanQuApp is doing or to help low-paid employees access their already earned money as PayActiv is addressing. (FinExtra)
  • “Platinum brands” like BlackRock and Goldman Sachs have started or are starting more investment vehicles to serve the needs of impacting investors.  In August 2016, Blackrock “Impact,” a new division supporting its $200B impact investment platform, launched its Impact Bond Fund and which trades under BIIIX ($19.2M AUM YTD).  In October at the Most Powerful Women Conference in Laguna Niguel, Goldman Sachs announced commitments of $50M to provide loans to female entrepreneurs, which the World Bank then followed with an additional $300M capital commitment. (Fortune)
  • “This is the future – an example of public and private coming together,” said Dina Powell, head of Goldman Sach’s impact investing and foundation teams, and now a senior adviser to the new Trump administration.  The chief driver of all this activity is investor demand. Deborah Winshel, BlackRock Impact head and a former president of a non-profit foundation, points to the transfer of wealth to women and to the young, whose investment goals, she says, transcend mere financial returns. (The Economist)

Sources: Fortune, Forbes, Impact Alpha, The Economist, FinExtra, GIIN

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