📰 Can you join us on 👋 Clubhouse this Tuesday afternoon for a live fireside chat?

Join Rehana Nathoo, Lindsay Wallace, and a few more of us on Clubhouse this Tuesday, Feb 2nd at 12pm ET

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All,

I’m excited to share with you a cool opportunity. Recently I got sucked into the vortex that is known as Clubhouse. If you haven’t heard of it yet, you will soon. Resistance is futile. To save you the suspense, Clubhouse is a social media app that allows you to host or join live audio-only conversations.

Tuesday’s live chat is going to be the first of what I hope will be many more to come. I love the podcast format, but I dislike how one-sided it is. It doesn’t allow me to engage in a conversation with any of you. That’s where Clubhouse comes in and why I’m going to be host live discussions with impact investing thought leaders going forward. Join the discussion here!

Clubhouse is by invitation only still and is only available on iPhone or iPad. Any subscribers who want to join the conversation but need an invite, email me and I’ll see what I can do to find you an invite.

What’s on tap

Here’s what you can expect in February (with more to come):

  • 🎙 Episode 26 - Behind the scenes with a startup impact fund investing in African SMEs (with Third Way Capital)

  • 🎙 Epiosde 27 - How private equity investment structures can derail our social impact efforts and how to fix them (with Delilah Rothenburg of The Predistribution Initiative)

  • 👋 Clubhouse “After-Dark” Fireside Chat with Jon Shell and Delilah Rothenburg (Wednesday, Feb 17th | 8pm - 9:30pm ET)

Industry updates

1. Social Capital Partners helps complete its first leveraged employee buyout

Congratulations to Jon, Bill, and the entire Social Capital Markets team! For those of you who haven’t listened to the most recent episode, Jon Shell was on (Ep 25) to discuss some innovative new work he and his colleagues were doing to tackle wealth inequality by encouraging more employee ownership. In their words:

When we started on our employee ownership journey about two years ago, it was with this basic idea:

  1. Employee ownership is a proven, scalable way to create wealth for people who don't otherwise have access.

  2. To encourage more companies to sell to their employees, we need long-term, flexible capital.

  3. Pension funds have long-term flexible capital, and care deeply about employees.

  4. Let's get pension funds to finance employee ownership! 

It was our belief that this idea made so much sense that if we could prove it could work, tens of billions of dollars would flow into funding employee ownership, creating a huge amount of employee wealth and opening a new and very scalable front in the fight against wealth inequality.

One problem: no pension fund had ever directly financed an employee ownership conversion. 

Well, that's no longer true.

On December 31st we partnered with the Healthcare of Ontario Pension Plan to finance the sale of Taylor Guitars to its employees, using the leveraged ESOP model available in the US. The iconic guitar maker, now the largest manufacturer of acoustic guitars in the US and a leader in sourcing sustainable and ethical wood, is now 100% owned by its 1,200 employees in the US and Mexico.  

Here’s hoping they will soon unlock the flood gates of pension fund money to finance more leverage employee buyouts! Also, if anyone is interested, SCP is looking for an associate or senior associate to help them with this work as they move forward. It’s a great opportunity to work with some really smart and caring people tackling one of the world’s great challenges.

2. Mars to launch a $200M National Outcomes Fund

As reported by Future of Good, MaRS Centre for Impact Investing is planning to launch a $200M National Outcomes Fund. The fund would aim to grant money to organizations based on their ability to achieve certain outcomes. This isn’t a Social Impact Bond but does utilize a similar pay for success framework. Listen to Episode #5 with Nadine Pequeniza for a critical discussion of the subject. The fund hasn’t launched yet but MaRS is aiming to sometime this year.

3. The Public Comment period on the GIIN’s Methodology for Standardizing and Comparing Impact Performance has now closed

In Nov 2020, The Global Impact Investing Network (GIIN) released a discussion paper around a new methodology for Standardizing and Comparing Impact Performance. According to the GIIN the Standardizing and Comparing Impact Performance methodology is:

a first of its kind analytic methodology for understanding market-, portfolio-, and investment-level impact performance—readers can explore this groundbreaking new approach for comparing impact results from one investment to another. 

The release of the discussion paper marked the beginning of a three-month comment period which ended as of January 31st. From here, the GIIN will incorporate industry feedback as it sees fit and publish the methodology as an industry standard. No word yet on how long it will be before we see the standard released. (Thanks Joel Harrison for the heads up on this!)

Recommended Readings

I've heard about this book from a lot of friends and industry colleagues. Here's the description:

The Ministry for the Future is a masterpiece of the imagination, using fictional eyewitness accounts to tell the story of how climate change will affect us all. Its setting is not a desolate, post-apocalyptic world, but a future that is almost upon us - and in which we might just overcome the extraordinary challenges we face. It is a novel both immediate and impactful, desperate and hopeful in equal measure, and it is one of the most powerful and original books on climate change ever written.


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