Louise Jordan Andrew Moncada Benson Ochira Essence Rodriguez Crystal Sevilla
Mission Driven Finance
Guest
Ahmed Sahid
Somali Family Service of San Diego
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ImpactAssets’ tenth IA 50 impact fund listing reveals growing market and innovative managers
BETHESDA, Md., Feb. 23, 2021—ImpactAssets has released the ImpactAssets 50 2021 (IA 50), a free online database for impact investors, family offices, financial advisors, and institutional investors that features a diversified listing of private capital fund managers delivering social and environmental impact as well as financial returns.
This year marks the second year in a row for Mission Driven Finance to be listed on IA 50, and the tenth edition of the database. Despite a tumultuous year, total assets under management (AUM) among selected fund managers jumped to a record $228 billion in 2020, up from $181 billion in 2019. Thirteen managers selected in this year’s showcase reported assets exceeding $1 billion. By comparison, in the IA 50’s inaugural year, assets totaled just $6.8 billion.
The IA 50’s Emerging Impact Manager list, which debuted in 2020 and spotlights newer fund managers that demonstrate potential to create meaningful impact, also saw significant growth. The number of emerging fund managers across a variety of themes and geographies included in this year’s list grew to 41, up from 16 managers in 2020. Total AUM increased to $917 million, up from $397 million last year.
“When we launched the IA 50, we knew there was tremendous potential for impact investing, but realized many interested investors weren’t aware of the incredible range of impact fund managers available to them. As the field has evolved, we have also become aware of the large number of innovative fund managers not identified via our traditional networks,” said Jed Emerson, ImpactAssets Senior Fellow and IA 50 Review Committee Chair. “More recently we have expanded the lens of our process to capture more breadth and diversity of impact fund managers and in doing so have also chronicled the progress made by impact investors as well as the work that still needs to be done.”
This year’s list revealed several investing trends.
CDFIs Take Center Stage: Seven Community Development Financial Institutions (CDFIs) were selected in this year’s IA 50, reflecting the critical role CDFIs have played during the COVID-19 pandemic—from distributing PPP loans to supporting small businesses within rural, indigenous and low-income communities, and communities of color. These organizations represent both national and locally-focused community funders and manage a combined $18.7 billion in assets which are catalyzed for creating jobs, building affordable housing and financing community services in underserved low-income communities.
New Category: In another reflection of the growth of impact investing, the IA 50 added a new Emeritus category this year highlighting 27 managers with a combined AUM of $8.8B. These fund managers have been on the IA 50 for at least five years; 10 managers have been on the list for all 10 years of the IA 50. The Emeritus list enables the IA 50 to continue to recognize the important contributions of these established managers, while making room for deserving new managers.
Investment Targets: In 2020, the global pandemic and subsequent economic downturn affected communities worldwide, and IA 50 fund managers focused on some of those hardest hit. A total of 63% of managers targeted investment in rural communities, while 54% specifically benefitted people of color and 48% were focused on advancing women-led businesses. Two-thirds (67%) of managers said their firm focused on underdeveloped markets where the market is relatively new, emerging, or subject to systemic challenges.
Diversity and Inclusion: While fund management remains overwhelmingly non-diverse, IA 50 fund managers are leading with diversity. This is especially true of the IA 50 Emerging Impact Managers, where 51% reported more than half of their investment professionals were women and 54% said more than half of their investment professionals were people of color.
Impact and Financial Return: Impact fund managers remained focused on delivering both positive impact and investment performance. A total of 87% of IA 50 fund managers targeted market rate or above rates of return and 92% delivered either in line or above their target returns. Emerging Impact Managers reported similar results, with 63% targeting market rates of return or above, and 98% delivering either in line or above their initial target returns.
“The growth we’ve seen in the IA 50 over the past decade is reflective of the growth, maturity, and increased diversity of the impact investing industry as a whole,” added Sandra Osborne Kartt, CFA, Director, Investments, ImpactAssets. “Along with the Emeritus and Emerging Impact Manager lists, this year’s IA 50 represents the vast array of impact themes and strategies available to impact investors today.”
In addition to Emerson and Osborne Kartt, the IA 50 Review Committee is comprised of an expanded group of impact investment experts and leaders, including Lauren Booker Allen, Senior Vice President, Impact Advisory, Jordan Park Group; Mark Berryman, Managing Director of Impact Investing, The CAPROCK Group; Ronald A. Homer, Chief Strategist, Impact Investing, RBC Global Asset Management (US) Inc.; Karl “Charly” Kleissner, Ph.D., Co-Founder of Toniic and KL Felicitas Foundation; Malaika Maphalala, CPWA® Private Wealth Advisor, Natural Investments, LLC; Cynthia Muller, Director of Mission Investment, W.K. Kellogg Foundation; Rehana Nathoo, Founder & CEO, Spectrum Impact; Stephanie Cohn Rupp, CEO and Partner, Veris Wealth Partners; Fran Seegull, Executive Director, U.S. Impact Investing Alliance, Ford Foundation; Liesel Pritzker Simmons, Co-Founder and Principal of Blue Haven Initiative; Julia Sze, CFA, Impact Investor, Julia W. Sze Consulting and Margret Trilli, President and CIO, ImpactAssets.
Osborne Kartt and Jennifer Kenning, CEO and Co-Founder of Align Impact and IA 50 Senior Investment Advisor, led the ImpactAssets and Align Impact Investment teams in the application scoring and analysis process.
About Mission Driven Finance
Mission Driven Finance is an impact investment firm and Certified B Corporation empowering community through new models of investing in social change. Launched in 2016, all of our funds and structured products are designed to close financial gaps that in turn will close opportunity gaps. Learn more about our community-connected capital approach and discover how easy it is to invest in your community.
About the ImpactAssets 50 The IA 50 is the first publicly available database that provides a gateway into the world of impact investing for investors and their financial advisors, offering an easy way to identify experienced impact investment firms and explore the landscape of potential investment options. The IA 50 is intended to illustrate the breadth of impact investment fund managers operating today, though it is not a comprehensive list. Firms have been selected to demonstrate a wide range of impact investing activities across geographies, sectors and asset classes.
The IA 50 is not an index or investable platform and does not constitute an offering or recommend specific products. It is not a replacement for due diligence. In order to be considered for the IA 50 2021, fund managers needed to have at least $25 million in assets under management, more than three years of experience as a firm with impact investing, documented social and/or environmental impact, and be available for US investment. Additional details on the selection process are available here.
The IA 50 Emerging Impact Manager list is intended to spotlight newer fund managers that may demonstrate future potential to create meaningful impact. Criteria such as minimum track record or minimum assets under management may not be applicable.
The IA 50 Emeritus Impact Manager list illuminates impact fund managers who have achieved consistent recognition on the IA 50.
About ImpactAssets
ImpactAssets is the leading impact investing partner for individuals, families and philanthropists tackling the world’s greatest challenges by investing in the world’s brightest ideas. We make it easy for our clients to “discover, connect and invest” in game-changing entrepreneurs and funds. Founded in 2010, ImpactAssets increases flows of money to impact investing with our 100% impact investment platform and field-building initiatives, including the IA 50 database of private debt and equity impact fund managers.
The ImpactAssets Donor Advised Fund is an innovative vehicle that empowers donors to increase the impact of their giving by combining it with strategic, sustainable, and responsible investing to build a sophisticated philanthropic endowment. The Fund currently has more than $1.4 billion in assets in 1,400 donor-advised funds, working with 350 wealth advisors across 60 financial services firms.
Inside the mind of a donor: Cause chat with philanthropist Laura Galinson
When was it?
February 2021
Speakers
Laura Galinson
Mission Driven Finance
Sharyn Goodson
Leichtag Foundation
Host
Fundraising Academy
Our Director of Community Relations Laura Galinson and Sharyn Goodson of Leichtag Foundation explore the importance of building authentic relationships with donors and dive deeper into understanding what drives a donor to give.
Our COO Shreya Sasaki joins Dr. Hei-ock Kim, Marci Bair, and Michelle Burkart to discuss gender equity at work in this Employee Rights Center and Kim Center for Social Balance Facebook Live event.
One of the youngest people to support Mission Driven Finance portfolio companies, Rachel Lozano Castro leaned into her passion and know-how to organize a shared donor-advised fund (DAF) with her family that supports our flagship place-based strategy Advance.
Having once started a giving circle of eight women to activate the power of collective philanthropy in her former neighborhood of Normal Heights, Rachel understands the impact of place-based investing.
What motivated you to support the Advance Strategy with Mission Driven Finance?
I want San Diego to be the welcoming city that it could be. I always think of us as a region or a city of neighborhoods. As such, how do we support the neighborhoods we care about?
Investing isn’t always about capital either. I believe deeply in give and trade economies like Buy Nothing groups and tool and book libraries. Once again, the locality is what makes a community tick.
One of our favorite quotes about impact investing is from a fellow impact investor, Ted Levinson: “Mainstream investing is moving money based on the future you predict. Impact investing is moving money based on the future you want.” What’s the future you want to create?
As someone who loves making connections between people or between challenges and solutions, I want to make investing accessible, particularly because impact investing can be a powerful unifier across political lines.
Members from all different parts of my family have participated in this fund—from cousins to uncles, my sister, grandmothers, and my brother-in-law. We don’t all see the world the same way. That’s a good thing—we differ in political ideology, but we can agree about helping people access capital in order to grow their business.
Impact investing could be a healing democracy tool—a bridge for conversation.
Growing up in a family of entrepreneurial people, nonprofit leaders, and pastors, I want to see fewer barriers to creating businesses. People should be able to execute an idea that the world needs to see without having to rely on generational wealth.
Now living with my husband Raul in Tijuana—a city I find very entrepreneurial—I’m spending a lot of time thinking about what ties our lives and neighborhoods together—particularly the connections that might make our supply chains and businesses more binational.
What has been the most surprising thing you’ve learned during the impact investing process?
For me, the local component in place-based investing is what makes impact investing fun. It complements my day job helping small businesses get access to the resources they need to succeed.
To explore using charitable capital for impact investing like Rachel and her family did, read our blog post on philanthropic investing or this resource from Amplifier on donor-advised funds and fiscal sponsors for collective giving.
We are proud to be a part of Integrated Capital Investing’s The Transformative 25 List, funds that are transforming finance for people and the planet.
Compiled by Jennifer Astone, founder of Integrated Capital Investing, the list consists of innovative funds that meet three of the following four criteria:
Employ integrated capital to reach those unable to access finance
Engage with creative finance structures for shared prosperity
Focus on social, relational, and ecological returns
Reshape ownership and governance for shared prosperity
In compiling this list, Jen asks this important question: How can finance address the issues of race, gender, and power?
“Not only does discrimination and bias plague our financial systems, but fund managers also need to address how financial power has been accumulated. And how it has created huge wealth gaps, especially for Black, Indigenous and People of Color (BIPOC),” Jen writes.
“The funds respond to these issues in different ways from commitments to diversity and democratic governance within their organizations to a deliberate focus on and measurement of who they serve. Their business models create incentives and change the way entrepreneurs and people access finance, especially those marginalized by the financial system.”
Congratulations to all the funds on this list!
Funds on the list represent 198 combined years of experience in integrated capital, have collectively raised over $234 million from 1,845 investors, and made 2,162 investments to date.
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