As Impact Clients Clamor For More COVID Investments, ImpactAssets Launches New Fund

Over the past month or so, nonprofit impact investment firm ImpactAssets has heard the same question from an increasing number of clients alarmed by the economic and health fallout from the pandemic: What can we do?

With that in mind, the firm recently announced the launch of the ImpactAssets COVID Response Fund, a hybrid of fast-action charitable giving and flexible impact investing with an initial capacity of more than $1 billion.

“This fund is, in large part, in response to the demand we’re seeing, conversations we’re having directly with clients,” says Margret Trilli, ImpactAssets president and Chief Investment Officer.

Client demand has, in fact, been significant since the pandemic hit, according to Trilli. ImpactAssets did $143 million in custom investment deals in 2019; it’s on track to invest more money than all of 2019 combined by early May.

Also, that $1 billion isn’t a ceiling; it’s a floor. “It’s poised to be as big as our clients want us to go,” says Trilli, who plans to add “significant’ follow up funding when needed. Fundraising will be done on a rolling basis, probably through the year.

Pillars

According to Trilli, the fund will focus on meeting the needs of small businesses and individuals, as well as those fighting on the front lines, through what she calls “three pillars.”

They include efforts to protect front-line workers, stop the spread of the virus and increase the supply of much-needed equipment; companies focused on critical areas like climate change and reducing inequality; and small businesses and individuals adversely affected by the downturn.

Trilli also emphasizes the importance of giving charitable funding to community development financial institutions and community banks.

“There’s a place investments can go that grants can’t. So the program leverages both worlds really well,” says Trilli.

A Head Start

They have a head start, according to Trilli. Outside of the new fund, ImpactAssets has already put to work over $300 million across most of the critical areas. “The fund makes it easier and more efficient for us to focus on these issues,” she says. “We’re putting a wrapper around the activities we’ve been doing for some time.” Also, she says, it will be more accessible to smaller investors.

Regarding ventures focused on areas of urgent importance, she points to such portfolio enterprises as Carbon Lighthouse, which uses AI-driven technology to help companies reduce energy use, and Ignite Power, which serves customers in remote areas of Africa with solar power. “We’re focused on companies that would be sorely missed if they didn’t survive,” she says.

As for helping small enterprises and people hurt by the economic downturn, “It’s an area impact investors have always been active in and we’re leveraging our existing network of partners to address the problem here and in emerging markets,” she says. The plan is to tap a pipeline of 5,000 partners and beneficiaries from the ImpactAssets ecosystem of mission driven portfolio companies, fund managers and community banks.

Trilli also expects the fund will evolve as the overall situation changes, although, she says, “I’m pretty certain there’s going to be a need to help small businesses and individuals throughout.”