Thursday, November 6, 2025

Chinese Startup NextEV Electric Supercar Beckons

By
Gino Baltazar, MS Finance
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NextEV NIO Model

China is hot on the heels of US-based Tesla.

It has developed a supercar capable of accelerating from 0-200kph in 7.1 seconds with top speed of 313kph, and which features an interchangeable battery system that allows the charging in 45 minutes and delivering a range of 427 kilometers.

NextEV Chairman William Li said in a statement said, “We believe that when the car ownership experience exceeds expectations, electric vehicles will become the natural choice for everyone, leading to a more sustainable tomorrow.”

Big Bet

Baidu Capital is an investor via a 20 billion yuan ($3 billion) investment fund Baidu set up late last year to focus on mid- and late-stage deals in the internet sector.

NextEV already has the backing of tech giant Tencent Holdings and Hillhouse Capital, and had targeted to have raised 20 billion yuan in China and overseas by the end of 2016

Source: Tech2eets

Impact Investing is Growing Rapidly

By
Gino Baltazar, MS Finance
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Impact Investing is the “act of investing money with the deliberate intention of achieving a positive financial return and social value,” as described by Professor Cathy Clark of Duke Fuqua School of Business.

In many ways, it “stems from the failures of traditional philanthropy and aid” (James Tansey, UBC Professor & CEO of OffSetters Climate Solutions ) to address many of social, economic and environmental problems that continue to face humanity today.

What Impact Investing Is and Is Not

Impact investing is distinguished from crowdfunding sites, such as Kickstarter, because impact investments are typically debt or equity investments over US$1,000 with longer ROI times (compared to VC) and a non-existent “exit strategy” (compared to IPO’s).

Impact Investing also encompasses the world of corporate venture investing or CVC. “We are at the start of seeing something that has the power to change the world,” says Daryl Brewster, CEO, CECP.

“Impact investing is the cutting-edge tool for companies looking to achieve financial, environmental, and societal goals – all at the same time. We expect more leaders in corporations to leverage their companies’ resources and competitive advantages through impact investing. Ultimately, this will make a positive impact in the marketplace and in people’s lives.”

Rapid Growth

The field is growing rapidly.  Surveys in 2011 by the Global Impact Investment Network or GIIN, and by the Monitor Group, counted around 60 new funds, and estimated growth then from US$50 billion to US$500 billion.

In a recent 2016 study by JPMorgan Chase and GIIN, the entire impact investing field is now projected to grow to US$2 Trillion by 2025 from the current US$60 billion.

The video above is of McGill’s Karl Moore talk with UBC’s James Tansey about how the world of investing is changing.

SOCAP16 Blended Value

By
Gino Baltazar, MS Finance
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Jed Emerson, who first coined the term “Blended Value” and is Chief Impact Strategist with ImpactAssets, talked about remaining grounded, focusing less on the how and more on the why of impact investing at SOCAP16 event in September.

Main Takeaway

Impact investing is not a “fuzzy concept of charitable good” but instead “a more integrated approach to value creation through capital, communities and our companies.”

Emerson reflected on these views in an accompanying article SOCAP16 and Beyond. In it, he passionately advocated our need to avoid the selling points of “cheap impact” and to work hard instead at really transforming the purpose of capital.

His opening talk at this year’s SOCAP and thoughtful article, we felt, really struck the right tone and his call for urgent need for action is inspiring.

***

“I firmly believe if many of our members spent more time connecting with the “why,” with cultivating a deeper understanding of the fundamental purpose of capital, we would find questions regarding the “how” of impact investing easier to navigate.

This question of why, of the purpose of capital is a much deeper, historic conversation than we have time to explore today—and is the focus of much of my current work—but the answer to this question of purpose is itself embedded within how we understand the place and structure of our current—and evolving—community.

As I have reflected upon SOCAP15 over these past months and have then also observed some of the subsequent discussions taking place in the broader impact community with regard to justice, equity and impact, I’ve come to realize what I know many of you see as well, and that is this:

As we move to scale our impact and continue to embrace the ongoing mainstreaming of our vision and practices, we need to create a truly big tent that may simultaneously hold all our various parts while also ensuring we’re all a part of the same gathering and overall movement committed to impact, equity and the effective deployment of diverse types of capital in pursuit of multiple returns.

Let me be clear—what stands before us is not a challenge of accommodation, compromise and mediocrity. We, as individuals, each need one another if we are to achieve our specific goals. It is the diverse perspectives and slightly differing goals of our constituent parts that will make for the creation of a more fully diverse and rich impact ecosystem within which we may all thrive and grow as we pursue our own understanding of what that vision of impact and value creation should look like.

It is in this way we are simultaneously a community of parts and Whole.”

More …

Developing Impact Ratings for Non-Profit Loans

By
Gino Baltazar, MS Finance
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The Northern California Community Loan Fund, or NCCLF, a nonprofit lender and technical assistance and consulting provider based in San Francisco whose mission is to fund “socially responsible investments that revitalize Northern California communities,” in October presented a new non-profit loan scoring system that “measures impact in real-time.”

Significance

One of the many challenges of rating true impact of impacting investments is formulating a robust and transparent way of scoring impact consistently across products, whether those are made by social enterprises or are used as vehicles for funding impacting investments.  A way to address this issue is to look at how other organizations, private or public, are designing and implementing their own scoring methodology.

NCCLF measures impact to four broad stakeholders: Community, Borrower, Beneficiaries, Financing. It uses the resulting impact scores to, for example, exclude or review loans with higher credit risk against high social impacts in low-income communities with historically low investment.

NCCLF’s scoring impact methodology was presented at the 2016 Opportunity Finance Network Conference in Atlanta.

Source: NCCLF

 

Envestnet Creates Impact-specific Portfolios

By
Gino Baltazar, MS Finance
-

To meet the growing demand for impact investment products, and in partnership with Sustainalytics, a leading ESG research firm, and Veris Wealth Partners, a leading impact investing wealth management firm, Envestnet in October announced a series of new Quantitative Portfolios (QPs) focusing on Climate Change, ESG, and Gender Lens.

Background

Over the last 4 years, the independent adviser (RIA) space has increasingly seen retail investors seeking financial advice and advisers starting to move from large wirehouses to become more independent.

These advisers, looking for a partner to take care of backoffice functions such as record-keeping and account statements or help in managing their clients money, call on the expertise of firms like Envestnet.

It landed data services provider Yodlee in September 2015 for $590 million, a figure so large that analysts don’t expect the company to break-even until 2020.

Strategy

Envestnet calls on this background and what it calls it claims is its deep index-based solution expertise to help manage more than US$1.3B of September 30, 2016.  The  Impact Quantitative Portfolios will be managed using tax-smart techniques and capabilities to position the impact portfolios for potential “tax alpha” that can add up to 60 basis points of value annually (PMC Quantitative Research Group, “Capital Sigma: The Return on Advice”, May 2016).

In the same month it announced its new Impact portfolios, it earned wealthmanagement.com’s 2016 award in the Sustainable and Responsible Investing (SRI) category.

A public company since 2010, Envestnet (ENV) is a leading provider of technology and web-based investment products to registered investment advisers and institutions in the US and abroad.

 

Top-down Bottom-Pyramid Impact Investing

By
Gino Baltazar, MS Finance
-
Impact Investing by Larger Organizations: Current Trends

At the SOCAP2016 event this past September, one panel proved valuable in gaining insights into how large organizations can help drive impact, small at first, then at scale as programs mature.

The Insight

Treat large competitors strategically as potential partners, or treat people that might benefit from impact investing as actual customers, instead of treating them as just “projects.”

***

Joan Larrea, CEO of Convergence, a company that is building the field of blended finance, argued that to get significant capital into impact investing fields, look at large competitors not as enemies but as potential partners. Mars and Danone, for example, stepped forward to be the main funders for a large supply chain fund aimed at reduction of injuries on site, number of women in workforce, etc. Great impacts, but the program may help Danone improve its supply chain in a very traditional way, she said.

Wellington Pak, Director of Business Innovation at FHI 360, leads strategy on impact investing. They have a foundation for which they are the sole backer. He gave the example of a community project, Manila Water, that has had an impact and yielded multiple financial and social benefits.

Manila Water, whose tagline is “care in every drop,” started providing clean water to people who were living in ‘temporary’ housing. Previously they used to buy water from filthy trucks, which came with many environmental and health challenges. Manila looked at these people not as projects but rather as customers, said Pak. They made it clear that this was a paying customer and the economics of it should be clear, while many industry observers assumed they’d lose their shirt trying to do business with such transient people. The people ended up being 99+% payers. Now Manila water has credit history on 2 million people that previously had no chance at establishing that credit history. They eliminated all those truck emissions as well.

Source: Ecopreneurist

B-schools are getting onboard

By
Gino Baltazar, MS Finance
-

Top B-schools like Wharton and Harvard are seeing the value of impact investing and getting their skins into the game.

Wharton’s MIINT program, for instance, is a year-long experiential lab designed to give students at business and graduate schools a hands-on education in impact investing. Students choose a social enterprise, study its value proposition and truly understand its impact. At the end of the program, student teams pitch for a potential impacting investment of up to $50K. Judges include Bridges Ventures partners and higher-ups from Bank of America, Merrill Lynch, and Goldman Sachs. “This is not unlike creating an investment fund,” Jacob Gray, who helps run the program.

Harvard in the Fall of 2016 began offering an impact investing course for the first time in its SEI program. Among the many topics the course explores is a recent form of innovation called the Social Impact Bond (SIB) or Pay for Success (PFS) which aims to “attract private money in the service of the public good.” Through the case studies and material, students will get a hands-on feel for dealing with SIBs and receive a useful framework for dealing with their decisions as future impact managers.

Times are changing and developments like these are significant. As more young people pursue internships, conduct research, and get involved, we see increasing proportions of financial portfolios transitioning to impact-focused funds.

More on Forbes’ coverage (June 2016).

Impact Investing in Latin America Reaches $1.2B, Survey Says

By
Gino Baltazar, MS Finance
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Source: ANDE

A report by the Aspen Network of Development Entrepreneurs (ANDE), released in August 2016, suggests that while impact investing in Latin America has reached $1.2 billion (AUM survey), its growth is being hampered by lack of early stage funding and weaker networks (compared to the US, Europe or India).

Investors headquartered in the region Latin America also often cited negative influences of political and regulatory concerns. Investors headquartered externally on the other hand, cited currency risk, given the recent devaluations of local currencies against the U.S. dollar.

Why This Matters

In a region like Latin America that is as fragmented socioeconomically as well as politically, entrepreneurial solutions have the greatest potential to sustainably solve the region’s biggest challenges.

Source: ANDE, figures in millions

Impact investing industry must grow across the region to reach this potential.

In the survey, microfinance, agriculture and health care were among the top impact areas that investors have funded.

Microfinance, which directly addresses financial exclusion and poverty in the region, alone accounted the lion’s share of funding among all sectors, $788 million or 60% of $1.3 billion invested (see figure above).

Key Findings

  • The report surveyed 78 firms in the region, including Brazil, Mexico and Colombia.
  • 28 impact investors headquartered in Latin America manage US $1.2 billion in assets under management (AUM).
  • The type of organizations making impact investments are diverse in size, in organizational structure, in the type of capital they have been able to raise, and in their relative expectations for financial and impact return on investment.
  • Respondents reported US$1.3 billion invested in 522 impact investing deals in 2014 and 2015.
  • Respondents remain optimistic about fundraising.
  • Across Latin America, common challenges to entrepreneurial development include the lack of interested entrepreneurs with growth ambitions, a lack of early stage funding, and weak networks.
  • Excess available capital for impact investing remains, approximately over $2 billion, and which represents an opportunity.
  • The majority of impact capital has been raised from institutional investors, such as development finance institutions (DFIs).
  • The study did not present any analyses on gender, or the roles women could be playing to grow impact investing in the region. Gender bias is prevalent in the region, according to other studies and reports.

Read More at ANDE

Catalyzing Private Foundation Impact Investing

By
Gino Baltazar, MS Finance
-

In April 2016, under US President Barack Obama’s administration, the US Treasury Department and IRS finalized regulations that make it easier for private foundations to make Program-Related Investments (or PRIs). Through the finalized regulations, “foundations may prudently choose to make investments that provide both an impact charitably and a financial return without facing a tax penalty.”

Impact

The recent set of regulations is will make it easier for foundations to mobilize government and, indirectly, its taxpaying citizens, to increase commitments to create “safe communities, strengthen schools, and achieve other charitable goals that make our country a place where everyone has the opportunity to succeed,” without incurring a corresponding tax penalty.

***

Today, the US Treasury Department and IRS finalized regulations that make it easier for private foundations to make Program-Related Investments (PRIs), which are investments – such as loans, loan guarantees, or equity investments – made primarily to accomplish a foundation’s charitable purposes, and not to generate financial returns.

PRIs are one example of such a financing tool that is not a grant, nor just an investment, but is in some ways like both. 

Some private foundations have a long history of using PRIs to make charitable investments that are intended to produce significant charitable returns, but generally negligible financial returns. A private foundation’s PRIs count towards the annual distribution that the foundation must make each year and receive other tax-favored treatment.  Therefore, PRIs have typically been treated as a part of a foundation’s grantmaking budget.

The PRI regulations, proposed in 2012 and finalized today, provide nine new examples illustrating how a foundation can use PRIs to advance its charitable purpose. Many foundations have had misperceptions of the rules governing PRIs and many believed that expensive processes, such as specific IRS approvals or legal opinions, were necessary to safely use this tool.

The new regulations, which closely follow the proposed regulations, illustrate the wide range of investments that might qualify as PRIs, including those accomplishing a variety of charitable purposes and utilizing a variety of financial arrangements.

More on the Whitehouse’s press release.

More details on the finalized regulations.

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