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The Brief: Feb 7, 2017

Hello ImpactAlpha readers!

#Featured: ImpactAlpha Original

Renewables are no longer ‘alternative.’ Fossil fuels are ‘legacy.’ The decision facing investors, from American families with 401(k)s to managers of the world’s largest pension and sovereign wealth funds, is whether to bet on the low-carbon energy transformation now well under way – or stick with business-as-usual.

ImpactAlpha’s David Bank has the full story.

 

#Dealflow: Follow the Money

Blockchain startup raises $2.5 million to trace food supply. Arc-net, based in Northern Ireland, is using the technology behind bitcoin to tackle food fraud – part of what could become a $14 billion tech market by 2019. Arc-net’s founders say their approach was inspired by the UK’s 2013 “horsemeat scandal.” Arc-net uses DNA sampling to verify food sources (other ventures do the same), then uses blockchain to track products’ path to market. Blockchain is increasingly being adopted outside of financial services for its ability to improve transaction transparency. Arc-net’s investor is Synergy Health founder Richard Steeves.

Hong Kong fund raises $16 million to back women business leaders in Asia. For all the talk about diversity, the number of women in leadership positions in Asia is actually falling, from 25 percent in 2009 to 20 percent in 2016. Advanced Asian economies have fewer women leaders than in similar markets worldwide. Delphinium Capital Partners has raised $16 million for a first close on Delphinium Female Leadership Fund I, which will provide growth financing for mid-size companies with strong female participation in senior executive position. Research shows that companies with female executives generate better profits and market returns, and attract and retain diverse workforces. Delphinium has been backed by several family offices and entrepreneurs.

Is NBA star Chris Paul the new face of affordable housing? Turner Impact Capital sure loves celebrities. Actress Eva Longoria is an investor in its impact fund for affordable and workforce housing, while former tennis champ Andre Agassi partnered with the firm on a $400 million charter school fund. Now, L.A. Clippers’ guard Chris Paul is investing his dollars and fame to help Turner’s Multifamily Impact Fund reach its $1 billion goal. Turner Impact was launched in 2014 to invest in affordable and workforce housing, schools and healthcare facilities.

Development banks back affordable mortgages in Serbia. Fewer than seven percent of adults in emerging economies have access to housing finance, according to the International Finance Corporation. The European Fund for Southeast Europe (EFSE) has extended a €20 million ($21.4 million) line of credit to UniCredit Bank to drive mortgage lending in Serbia. EFSE is backed by German development bank KfW and a roster of European donors and development finance institutions.

#Signals: Ahead of the Curve

How investors can help rebuild communities with muni bonds. Municipal bonds are a $3.7 trillion market, and lately, they’re attracting record investment dollars. But what’s the impact? HIP Investor offers impact scoring for muni-bonds and other fixed-income investments, while Activest is trying to build a funding stream for promoting policy reforms. They’re needed: In many cities, muni bonds are underpinned by jail bonds and fines that disproportionately affect blacks and Latinos. Some towns in the St. Louis metro area earn as much as 40 percent of their income from fines and fees. Paul Herman from HIP and Mary Taft-McPhee and Rodrigo Davies from Neighborly will join Transform Finance’s webinar tomorrow (Wednesday) to explore muni bonds and social justice.

Move over microfinance. Mobile money is touted as the new magic bullet. Nearly 4 in every 10 dollars from impact funds targeting emerging markets in 2015 went to microfinance, but access to small amounts of credit hasn’t been the panacea for poverty that was promised. Fuller access to a variety of financial services enabled through mobile phones, is the future, says Kusi Hornberger, a vice president at Global Partnerships, a Seattle nonprofit investor. Recent evidence suggests that mobile money provider M-Pesa has helped lift two percent of Kenyans out of poverty. But the better-than-cash crusade has its own critics, “If the mission really is poverty alleviation, it’s not money’s physical form, but how it is distributed, that matters,” writes Phil Mader in NextBillion.

A picture emerges of widening income inequality in the U.S. “Average income” can be misleading when the midpoint looks like a liveable wage, but the stretch between the lowest and highest salaries is growing. An interactive graphic shows how income spreads have grown. In 1960, income levels in particular sectors tended to cluster; today, levels are spread across a wider pay spectrum, particularly for higher skill jobs. The exceptions: the legal sector, where income distribution has always been wide; and low-skilled work like food preparation, care services, and cleaning and maintenance, which are at the lowest end of the earning spectrum. Low-skilled work is also the source of most of the US’s job growth.

#2030: Long-Termism

“Gig Workers Riot in London and New York.” That's a possible 'surprise headline’ from September 2021, according to “Paradox of Progress,” the global trends report from the National Intelligence Council. Here’s the story:

“The Gig Workers Movement (GWM), representing the growing number of independent, temporary workers, organized violent protests and denial of service cyberattacks on major companies in London and New York to protest poor pay, job uncertainty, and a lack of benefits.

“Movement leaders warned they would stage more disruptive protests unless they received stronger social support for basic food and housing supplemental programs.”

Onward! Please send any news and comments to editor@impactalpha.com.

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