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Cambridge Associates, a global investment firm, in partnership with the Global Impact Investing Network, introduced a report containing findings from the first comprehensive analysis of the financial performance of market rate private equity and venture capital impact investing funds. Despite a perception that impact investing means concessionary returns, the Impact Investing Benchmark has exhibited strong performance of impact investment funds over time. View the report here.
The Ewing Marion Kauffman Foundation shared a finding that a main source of equity financing for new firms is VCs. The finding reports that venture-backed companies have faster employee growth, greater sales, and faster sales growth. These companies also professionalize earlier, have an increased likelihood of an Initial Public Offering (IPO), and have greater post-IPO survival rates. Read more.
Ira Ehrenpreis and Nancy Pfund, two early investors in Tesla Motors Inc., have raised a $400 million venture capital fund as part of San Francisco venture firm DBL Partners. DBL and its predecessor fund, J.P. Morgan Bay Area Equity Fund, invested early in companies such as Tesla and Pandora Media. DBL’s definition of social impact is open-ended, from a commitment to diversity–three of the five startups the new fund already backed are founded by women, for example, to producing clean energy, to enabling reuse of materials in a supply chain, to creating employment in economically depressed locations. DBL will use the new fund to make investments of about $10 million to $20 million per company, in a variety of sectors, including clean tech, health care and information technology. Ms. Pfund said that most investments will be for early-stage startups. Read more.
The F.B. Heron Foundation’s President Clara Miller discusses the Foundation's evolution and common myths we see in the social sector. Myth #1: The social sector can solve the large-scale, systemic, and urgent problems that society faces. Myth #2: Investors, and the money that they provide to enterprises, are the prime agents of social impact. Myth #3: Our primary path to success will be as a uniquely insightful, highly targeted, “but-for” donor/investor. Read more.
Global Finance sat down with Ommeed Sathe, vice president and head of impact investing at Newark, New Jersey-based insurer Prudential Financial, to discuss how corporate social responsibility and profitable investing can go hand in hand. Sathe discussed his strategy and organization, the distinction between socially responsible investing and impact investing, and financial returns. Read more.
Former Peace Corp volunteer turned investment banker, Jennifer Pryce, who is now democratizing and innovating the impact investing space, launched Vested.org last year, so anyone with $20 and an internet connection can be an impact investor. Calvert Foundation pools the money to provide low-cost loans, in turn helping a daycare center owner in Illinois expand her business, an Ethiopian farmer buy a cow or a woman in rural India get cataract surgery. Read more.
Merrill Lynch has announced that it is launching a multi-asset class portfolio aimed at clients interested in impact investing. The portfolios seek to deliver market-rate returns as well as social rewards. “Clients are telling us they want their portfolios to reflect their values and help improve the world they live in. As their enthusiasm grows, we continue to offer new opportunities to meet this need. We have made impact investing a strategic priority and will bring clients innovative solutions that help them promote positive social change,” says Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. Read more.
CDFI Fund to Hold National Listening Tour on a Community Development Finance “Framework for the Future”
The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced today a national listening tour to solicit public opinion regarding a new strategic framework for the CDFI Fund. The CDFI Fund is particularly interested in hearing input on the following: Program Effectiveness: Are the CDFI Fund’s programs working optimally for communities? What should be improved and how? Access: What more can the CDFI Fund do to reach communities that need CDFIs but are either not being served by them or have limited access to CDFI Fund support? Innovation and Scaling: How can the CDFI Fund best support CDFIs to continue to innovate? What will it take to scale solutions that are known to work? Customer Service: What works well at the CDFI Fund and what needs to be improved? Data: How can the CDFI Fund support the use of data to strengthen the industry and increase its impact? Blind Spots: What are the issues that should be on the CDFI Fund’s radar screen but are not? For those unable to attend the listening sessions in person, the CDFI Fund has created an online survey, available at www.cdfifund.gov/thenextfiveyears. The survey responses will be combined with feedback from the listening session participants and will inform the CDFI Fund’s development of strategic objectives. The CDFI Fund has also launched a Twitter account that will be providing updates during the Listening Tour. Follow the CDFI Fund @CDFIFund and the hashtag #CDFIFundListens. Registration Information Registration is required and will be honored ...
The Global Impact Investing Network (GIIN) and J.P. Morgan have published the 5th edition of Eyes on the Horizon, their annual impact investor survey. Participants include a few of CDVCA's member funds: Bridges Ventures, CEI Ventures, Inc., Pacific Community Ventures, and SJF Ventures. Notable findings from the report: Impact Investing is a growing sector. "One thing the survey does show is that there is significant and growing private capital out there that is interested in addressing social and environmental issues," said Abhilash Mudaliar, research manager at the GIIN. Increase in investment diversification. Investors report to plan the most growth in the energy, food and agriculture, health care, and education sectors. The region that the highest number of investors wanted to increase their investments in was Sub-Saharan Africa. Two main challenges faced by investors. The two main challenges investors noted were "lack of appropriate capital across the risk/return spectrum" and "shortage of high quality investment opportunities with track record." Download the report here.
During the First Innovative Enterprise Week in Riga, Latvia, the European Investment Bank (EIB) Group and the European Commission (EC) launched three new financial products to increase the competitiveness of innovative European companies under the initiative “InnovFin – EU Finance for Innovators”. Of these three financial products is the InnovFin SME Venture Capital, launched by the European Investment Fund (EIF) as part of the EIB Group. The InnovFin SME Venture Capital primarily invests in early-stage enterprises via eligible intermediaries, such as venture capital and business angels funds. Under this new financial product, the EIF focuses on investments in around 30 funds, mobilizing a total amount of up to EUR 1.6 billion to be invested in enterprises located in the EU-28 Member States and Horizon 2020 Associated Countries. Investments will focus on innovative sectors such as life sciences, clean energy, and high-tech. To read more, click here.