Author Archive

Small Impact Investment Funds Outperform Conventional Funds of the Same Size

July 31, 2015  |   CDVCA Ventures Blog,Industry News,Research   |     |   Comments Off on Small Impact Investment Funds Outperform Conventional Funds of the Same Size

On June 25, 2015, Cambridge Associates and the Global Impact Investing Network (GIIN) published a report titled “Introducing the Impact Investing Benchmark.” This report contains findings from the first comprehensive analysis of the financial performance of market rate private equity and venture capital impact investing funds. At launch, participants of this Impact Investing Benchmark comprised 51 private investment (PI) funds with social impact objectives. Notable findings from the report: Impact investment funds outperform conventional Private Investment funds. Between 1998 and 2004, smaller impact investment funds that raised under $100 million returned a net IRR of 9.5% to investors, outperforming comparative, similar-sized funds that did not focus on impact investments (4.5%). These smaller funds also outperformed larger impact investment funds over $100 million (8.3%) and comparative funds over $100 million (8.3%). Impact investment funds focused on emerging markets perform better than those in developed markets. Emerging markets (EM) impact investment funds had a return of 9.1% compared to 4.8% for developed markets. EM impact investment funds focused on Africa returned 9.7%. Impact investment funds are no exception to how important manager selection is to the investment process. Reinforcing manager selection and due diligence are critical in the investment process (especially the first year) for achieving superior returns and in risk management for impact investment funds. Data is scarce for both the young impact investing industry and the Impact Investing Benchmark; performance will change as new funds are added and older funds mature. The 51 PI funds in the Impact Investing Benchmark held assets of $6.4 billion ...

Reintroduction of Small Business Access to Capital Act .

July 30, 2015  |   CDVCA Ventures Blog,Public Policy   |     |   Comments Off on Reintroduction of Small Business Access to Capital Act .

Today, July 30, 2015, Senators Stabenow, Shaheen, and Peters are reintroducing the Small Business Access to Capital Act of 2015 to provide another $1.5 billion in funding for the State Small Business Credit Initiative.

DC Community Ventures Provides Quasi-Equity Loan to JRINK

July 24, 2015  |   CDVCA Ventures Blog,Member News   |     |   Comments Off on DC Community Ventures Provides Quasi-Equity Loan to JRINK

DC Community Ventures (DCCV), a member CDVC fund based in Washington DC, announced that it has provided $400,000 in revenue-based financing to support the growth of JRINK. JRINK is a leading cold pressed drink company offering a wide selection of healthy drinks to the nation’s capital region.  JRINK will use the capital for additional locations, technology investment and better sourcing. “DC Community Ventures is committed to supporting JRINK’s continued growth,” stated Candler Young, co-Managing Partner for DC Community Ventures.  “We were attracted to JRINK’s impressive management, current financial performance, product offering and commitment to provide jobs and management opportunities for women.” 87% of JRINK’s current employees are females, the vast majority of whom come from minority backgrounds. “We’re excited for the future of health & wellness; we believe that the food we consume should be natural and simple,” said Jennifer Ngai, co-founder of JRINK. “With the support of DC Community Ventures and our dynamic team, we believe JRINK is well-positioned to become a major player in the industry. We are thrilled that DC Community Ventures shares our mission for better living.” Read more >>

Senate Appropriations Committee Passes Financial Services and General Government Bill

July 24, 2015  |   CDVCA Ventures Blog,Public Policy   |     |   Comments Off on Senate Appropriations Committee Passes Financial Services and General Government Bill

Yesterday, (July 23, 2015) the Senate Appropriations Committee reported out a Fiscal Year 2016 spending bill for Financial Services and General Government which included appropriations for the Treasury Department and the CDFI Fund. The Committee's reported bill included a level of $221 million for the CDFI Fund--an amount $9.5 million below the FY 2015 level and $12.5 below both the President's Fiscal 2016 Budget request and the House request of $233.5 million. The Committee’s draft report raises questions about the applications and awards process, lack of transparency in the Fund’s programs, and the ability to verify investment impacts. It directs the Fund to establish clear reporting requirements and to collect data on the impact of Fund on underserved populations and communities. The report also directs Treasury, in designing programs, to take into consideration the challenges of rural and non-metro communities and encourage the Fund to improve the geographic diversity of its award recipients. Read the draft report >> - The House and the Senate did not set aside any funds for Healthy Foods Financing, though the Senate did not rule out the use of FA/TA for Healthy Foods in their report language. - The bulk of the cuts came from FA/TA, which is $14.5 million below the House level. The Senate also provided $1 million less than the House for Native Initiatives, but they added an additional $3 million for BEA compared to the House. - Finally, whereas the House did not include additional authority for the CDFI Bond Program, the Senate included $750 million, the level provided ...

Call Your Senator on Appropriations for the CDFI Fund

July 22, 2015  |   CDVCA Ventures Blog   |     |   Comments Off on Call Your Senator on Appropriations for the CDFI Fund

The Senate Appropriations Subcommittee on Financial Services and General Government today approved a FY2016 funding measure that prioritizes national programs to enforce U.S. laws, spur small business growth and maintain a fair and efficient judicial system. Subcommittee approval of the FY2016 Financial Services and General Government Appropriations Bill clears it for committee consideration on Thursday. Majority Press Release >>   The Subcommittee bill recommends a level of $221 million for the CDFI Fund. This amount is $9.5 million below the current rate and $12.5 below the Fiscal 2016 Budget request.The CDFI Coalition urges everyone to call their Senator to urge a restoration of the reduction and support for the CDFI Fund’s budget request. The full Appropriations Committee is scheduled to mark-up the FY 2016 bill tomorrow morning at 10:00 am (eastern). Please make your call today. View the list of the Members of the Appropriations Committee. Key points: The Community Development Financial Institutions Fund (CDFI Fund) was established within the U.S. Department of Treasury in 1994  to promote community development in economically distressed urban and rural communities by investing in and growing Community Development Financial Institutions( CDFIs) across the country. Since 1994, the CDFI Fund has awarded more than $2 billion on a competitive basis to CDFIs, including Native American CDFIs, small and emerging CDFIs and financial institutions through the BEA Program; In FY 2014, CDFIs made over 28,000 loans or investments totaling nearly $3 billion, financed over 12,000 small businesses and over 25,000 housing units and created more than 35,000 jobs; A reduction of the ...

Register now for FINAL CDVC Fund Training in Kansas City, MO

July 22, 2015  |   CDVCA Ventures Blog,Industry News   |     |   Comments Off on Register now for FINAL CDVC Fund Training in Kansas City, MO

Register now for the CDFI Fund's Expanding CDFI Coverage in Underserved Areas Capacity Building Initiative workshop in Kansas City, MO. The first workshop in June in Baltimore was a resounding success.  This will be a great opportunity to learn about and receive training and assistance in forming and operating a Community Development Venture Capital (CDVC) fund.  We are cooperating with our sister CDFI trade associations in providing a series of two-day training sessions this summer.  These sessions are provided FREE of charge under a capacity building contract from the federal CDFI Fund.  Participants in the sessions will be given first preference in receiving free technical assistance--both one-on-one and in groups--from CDVCA and other technical assistance partners. Expansion by Existing CDFIs, August 19-20, 2015, Kansas City, MO: This workshop is targeted at existing CDFI banks, credit unions, loan funds, and venture capital funds seeking to explore successful strategies for geographic and product expansion in underserved areas and areas of persistent poverty. Details of the sessions and how to register are in the information found HERE.  Remember, FREE technical assistance and group programs will be available in the months after the workshops on a first-come, first-served basis in the months after the sessions, and preference will be given to those who attend the workshops. Please do not hesitate to contact Kerwin Tesdell at ktesdell@cdvca.org if you have any questions.

Bridges Ventures receives top grade from UN PRI

July 22, 2015  |   CDVCA Ventures Blog,Member News   |     |   Comments Off on Bridges Ventures receives top grade from UN PRI

Member CDVC fund Bridges Ventures has been awarded the highest rating of A+ for its overall approach to responsible investment and its ESG practices in private equity. The PRI’s annual assessment process plays an important role in promoting best practice and transparency around ESG issues. Read more >>

Success of Three Early UK Social Impact Bonds

July 22, 2015  |   CDVCA Ventures Blog,Member News   |     |   Comments Off on Success of Three Early UK Social Impact Bonds

Three early UK social impact bonds have been successful in paying back investors ahead of schedule. Two of the three SIBs, Career Connect and Teens & Toddlers, were backed by member CDVC fund Bridges Ventures and have been recommissioned for a second round. Andrew Levitt, investment director at Bridges Ventures and a board member for the UK-based Career Connect SIB, said: “The Career Connect story provides demonstrable proof that the excitement around social impact bonds isn’t just a case of hype over substance. The structure of the funding allowed Career Connect to experiment with new approaches, while the clear feedback loops inherent to the SIB model helped them to identify the most effective and focus their programme to reflect that. With a standard contract, none of this could have happened.” Read more >>

Senate Approves Tax Extenders Legislation

July 22, 2015  |   CDVCA Ventures Blog,Public Policy   |     |   Comments Off on Senate Approves Tax Extenders Legislation

The Senate Finance Committee approved on July 21, 2015 a tax extender package.  The bill includes an amendment by Senator Cardin to increase NMTC credit authority to $3.94 billion for 2015 and 2016. The cost of the amendment is $230 million over the 10 year scoring period.  From 2008 to 2015, inflation reduced the Credit by 12%.  Cardin’s amendment provides what amounts to an inflation adjustment. It is the first increase in NMTC since enactment of the American Renewal and Recovery Act in 2009.

NY Times: The Good Jobs Strategy

July 08, 2015  |   CDVCA Ventures Blog   |     |   Comments Off on NY Times: The Good Jobs Strategy

New York Times Op-Ed Columnist Joe Nocera writes about the interest in the good jobs strategy in an op-ed piece released yesterday. Excerpt: At the Aspen Ideas Festival — an annual summer gabfest that presents all sorts of interesting ideas, from the improbable to the important — one of the big themes this year was jobs. How will America close the skills gap? Where will the good middle-class jobs of the future come from? I heard pleas for infrastructure spending as a job strategy, and creating jobs by unleashing our energy resources. There were speakers who believed that innovation would bring good jobs, and speakers who feared that some of those innovations — in robotics, for instance — would destroy good jobs. And then there was Zeynep Ton. A 40-year-old adjunct associate professor at the Sloan School of Management at M.I.T., Ton brought one of the most radical, and yet one of the most sensible, ideas to Aspen this year. Her big idea is that companies that provide employees a decent living, which includes not just pay but also a sense of purpose and empowerment at work, can be every bit as profitable as companies that strive to keep their labor costs low by paying the minimum wage with no benefits. Maybe even more profitable. Getting there requires companies to adopt what Ton calls “human-centered operations strategies,” which she acknowledges is “neither quick nor easy.” But it’s worth it, she ...

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