Amid protracted wave of extreme heat in Southeast Asia, responsAbility’s new $500 million Asia-focused climate fund is right on time. The Zurich-based impact investment manager, known for its commitment to economic resilience and opportunity in emerging markets, recognizes the threat that climate change poses to lives and livelihoods worldwide. With its Asia Climate Fund, it is looking to usher more institutional climate capital into a region that is home to more than half the world’s population and which remains largely powered by the dirtiest fossil fuel: coal.
This month’s Liist of actively raising impact funds features three impact investment firms that are in the market with $500 million funds. For the impact space, $500 million remains on the larger end for any fund not operated by a mainstream private equity or infrastructure firm. US-focused North Sky Capital has an established track record as a green infrastructure investor, having deployed more than $725 million into 40 renewable energy, wastewater management and other assets through three funds since launching its infrastructure strategy nearly 15 years ago. The firm believes its fourth fund will be buoyed by tailwinds from the Inflation Reduction Act.
Agriculture Capital, meanwhile, is raising $500 million for its first fund after nearly a decade acquiring and restoring farmland in the US and Australia. The firm is focused on carbon sequestration and biodiversity restoration, and is adding Europe to its list of geographies.
Also on the month’s Liist: two high-impact debt funds. Colorado-based Mad Capital is also supporting the transition to sustainable agriculture. Its $50 million fund provides loans to US-based farmers shifting to organic farming but who are unable to access traditional lenders. Washington, DC-based Connect Humanity is blending its low-cost and flexible loans with federal and state funding streams to deliver reliable and affordable Internet connectivity to rural Appalachian communities.
Burnt Island Ventures is seeking to address clean tech’s “$900 billion afterthought”: water. The firm’s first fund, with a target of $50 million, cuts early checks to water management, storage and access startups around the world. Next Billion Capital Partners is raising $250 million for a growth equity fund for companies providing digital access to education, healthcare, finance and other services.
Featured on this month’s Liist:
- Agriculture Capital
- Burnt Island Ventures
- Connect Humanity
- Mad Capital’s Perennial Fund II
- Next Billion Digital Growth Fund
- North Sky Capital’s Sustainable Infrastructure Fund IV
- responAbility Investments’ Asia Climate Fund
Check out ImpactAlpha’s database of more than 100 impact funds that have recently been featured on The Liist.
Disclaimer: The Liist and this post are based on available information, sourced by ImpactAlpha. Information has not been further reviewed by the managers nor verified by third parties, is not guaranteed for accuracy or completeness, and should not be relied upon as investment advice or recommendations. Nothing in The Liist, this post or on ImpactAlpha.com shall constitute an offer to sell or the solicitation of an offer to buy securities.
Agriculture Capital
Agriculture Capital has spent a decade acquiring US farmland and converting it to sustainable and regenerative practices. The Portland, Ore.-based firm has more than 20,000 acres of farmland under management in California, Oregon and Australia, and says its soil and land improvements help sequester more than 14,000 tons of CO2 annually. The real assets manager also owns several midstream facilities, such as fruit processing plants, where its focus is diverting waste from landfills.
Agriculture Capital is in the market with its first fund, with plans to raise $500 million by 2025 for farmland acquisition and management. The Agriculture Capital Biodiversity and Carbon fund will focus on carbon sequestration and emissions avoidance, as well as biodiversity preservation and growth.
- Type of investments: Equity in real assets
- Fund structure: Real estate company; open-ended raise with 3-year lock-up ($500 million goal by 2025; $2 billion overall goal)
- Geographic focus: US, Europe, Australia
- Eligible investors: Accredited, minimum $250,000 investment
- Sample impact targets/metrics: Biodiversity: number and quantity of species; Carbon: tons of carbon removed, reduced and avoided, with a goal of sequestering up to 220,000 tons at maturity; Other metrics: soil health, water efficiency and quality
- Contact information: Agriculture Capital investor relations
Burnt Island Ventures
Tom Ferguson ran an accelerator for water startups but couldn’t find early-stage investors to support them. He launched Burnt Island Ventures to make pre-seed to Series A investments in water management, storage, access and companies, which are a “$900 billion afterthought in cleantech,” the firm says. “We believe that water is radically underfunded compared to its economic and impact importance, and relative to its sheer size.”
The firm will cut checks of up to $2.5 million via a planned $50 million fund. It has so far raised $26.5 million.
- Type of investments: Equity
- Fund structure: Traditional LP/GP
- Where fund is domiciled: Delaware
- Leadership: Woman- and diverse-led
- Commitments/investors: More than 35 backers including Xylem, WovenEarth Ventures, and individual investments from former Environmental Defense Fund president Carl Ferenbach, Skype’s Niklas Zennström, and B Capital Group’s Howard Morgan
- Fund investments: Three investments, including Altus Thermal, which provides low-emission water heaters, and HOPE Hydration, which provides hydration stations at events
- Sample impact targets/metrics: Gallons of water saved / treated / provided; kilowatt-hours generates, and estimated CO2 emissions saved
- Contact information: Tom Ferguson
Connect Humanity
Rural and mountainous regions of the US often have spotty cell service and Internet connectivity. For the people living in these areas, there are consequences to unreliable Internet access, including fewer job opportunities, lower access to education and skills training, poorer health services, and more.
Washington, DC-based Connect Humanity leverages federal and state funding and blends it with low-cost, flexible loans so that “community-oriented” Internet service providers, or ISPs, can extend coverage into underserved areas. The nonprofit impact investor says it is filling a gap in the market for projects that don’t qualify for private equity investment and which are too large for most community development financial institutions.
It is in the market with a $25 million fund.
- Type of investments: Up to $4 million in senior debt and revenue-based, collateralized by network infrastructure assets; coupled with technical assistance
- Fund structure: LLC with a credit facility
- Leadership: Diverse-led
- Commitments/investors: $500,000 in first-loss capital from Microsoft
- Sample investments: $3 million proof-of-concept fund, with investments including revenue-based finance + grants to a family-run ISP in Enfield, NC, and a loan + state/federal grants for an ISP extending service in Macon County, Ala.; 100% invested in Opportunity Zones; 75% to diverse and/or women-owned businesses
- Sample impact targets/metrics: number of women/diverse-owned businesses backed; number of low-income/historically underrepresented households connected
- Contact information: Brian Vo
Mad Capital’s Perennial Fund II
Mad Capital provides long-term and flexible credit to farmers in the US to support their transition or regenerative and organic practices. The firm is in the market with its second Perennial Fund to provide $1 million to $2 million loans to farmers excluded from conventional financing and who would otherwise be unable to finance their organic transition. Its goal is to finance about 50 farmers and enable 100,000 acres of farmland in the US to transition from chemical-based farming. It wants to move a quarter of those acres fully to organic farming. It has so far raised $14 million for the fund.
- Type of investments: Senior debt
- Fund structure: LLC managing a blended finance credit facility
- Where fund is domiciled: Colorado
- Commitments/investors: A dozen backers including the Rockefeller Foundation, the Schmidt Family Foundation and Builders Vision
- Eligible investors: Accredited; Investors can make commitments via two tranches: a preferred class senior tranche with a 6% hurdle (target amount: $30 million), and an impact junior tranche with 3% hurdle, meant for grantmakers (target amount: $20 million)
- Fund investments: $7 million in disbursements via eight loans, with borrowers including organic farm developer Bluebird Farms
- Contact information: Brandon Welch
Next Billion Digital Growth Fund
NextBillion Capital Partners offers growth capital for providers of essential goods and services in emerging markets and has a portfolio that spans fintech, e-commerce and procurement, healthech, edtech, among others. It’s looking to raise $250 million for its Digital Growth Fund to invest in startups in Southeast Asia, Latin America, Africa and the Middle East.
The fund will cut checks of $10 million to $15 million, focusing in particular on companies catering to women, low and middle-income households, and micro and small businesses.
Next Billion announced a first close in April.
- Type of investments: Equity
- Fund structure: GP / LP
- Where fund is domiciled: Luxembourg
- Leadership:
- Commitments/investors: Impact Engine, Capricorn Investment Group, responsAbility
- Sample investments: Qoala, a low-cost insurance provider for Southeast Asia
- Contact information: Ken Toyoda, Eduard Melli
North Sky Capital’s Sustainable Infrastructure Fund IV
Minneapolis-based North Sky Capital has been investing in sustainable infrastructure in the US for nearly 15 years. Two years ago, it closed a $200 million fund focused on infrastructure serving low-income communities. The firm has invested more than $725 million in 40 infrastructure projects through three funds, and has collectively supported 3.3 gigawatts of renewable energy generation and treated more than 40 billions of wastewater, among other outcomes.
North Sky is now in the market with its fourth infrastructure fund and a goal of raising $500 million for the renewable energy transition, grid efficiency and resilience, and waste and water management. The fund will make equity investments of $10 million to $50 million to develop, build and/or operate the projects.
- Type of investments: Equity
- Fund structure: LP/GP with a tiered management fee structure of 1.5% or less and 15% carried interest
- Target internal rate of return: 14% (North Sky reports its previous three infrastructure funds have achieved a net IRR of +10%)
- Where fund is domiciled: Delaware
- Sample impact targets/metrics: As relevant per type of project: waste/pollution mitigated; soil health; greenhouse gas emission reduction; job creation; renewable energy generated, etc.
- Contact information: Gretchen Postula
ResponsAbilty Investments’ Asia Climate Fund
Zurich-based responsAbility has directed nearly $15 billion in investments supporting financial inclusion, climate resilience, small business finance and sustainable food production in emerging markets since launching in 2003. The firm, now part of London-based investment manager M&G, is in the market with a 10-year, $500 million debt fund to support the green transition and climate resilience in Asia.
The Asia Climate Fund will offer loans of $15 million to $20 million for distributed renewable energy projects including commercial and industrial solar, energy storage, wind-solar hybrid, and energy-as-a-service. The fund has so far made two investments.
- Type of investments: Debt
- Fund structure: Blended finance Luxembourg Reserved Alternative Investment Fund, SFDR Article 9
- Where fund is domiciled: Luxembourg
- Commitments/investors: Anchor investments from FMO and KfW development banks
- Sample impact targets/metrics: Renewable energy metrics (megawatts generated, storage capacity created); Electric mobility metrics (number of EVs financed, batteries manufactured, quantity of fuel saved); Energy savings; Circular economy (tons of waste recycled, energy savings from reduced metal use)
- Contact information: Stephanie Bilo
