The first wave of impact investors in Latin America built a big tent for individuals and institutions to mobilize capital for solutions to pressing social and climate challenges. Asset managers built funds. Allocators committed capital. And entrepreneurs raised financing for promising social and climate startups.
The task for the next wave of investors: Expand the tent.
“Change is not led by one person, but by a collective of organizations,” says Carolina Suarez, who is helping build the field as head of Latimpacto, the Latin America arm of the global venture philanthropy network.
At “Impact Minds,” Latimpacto’s annual conference in Oaxaca, Mexico this week, long-time impact practitioners shared hard-earned lessons and mobilized capital for new strategies. New entrants met seasoned players. Wealthy families, foundations and corporations found entry points.
“We’re here to bet on impact for Latin America,” said Lorena Guille of Monterrey-based Fundación FEMSA. Outmoded business and investment models let inequality and violence take root in the region, says Guille. “It’s possible to build a different legacy. Today we’re writing a new chapter.”
The conference was full of evidence for that new chapter. ImpactAlpha dug up details of deals, fundraises, mergers and milestones.
Catalytic capital and blended finance
- Impact bonds. IDB Invest, the private sector arm of the Inter-American Development Bank, has structured, invested in, and mobilized private capital for three first-of-a-kind impact-themed bonds in Central America over the last 12 months, including a $50 million sustainability bond in Guatemala, a $50 million blue bond in Costa Rica, and an $80 million social/gender bond in El Salvador. The development financier has now supported 43 thematic bonds that have raised more than $3.7 billion in Latin America. The bank is helping originate, guarantee and raise such capital as part of a strategy shift to take on more risk and make Latin American impact investments more attractive to global investors. The bank aims to be “a conduit between opportunities that generate scalable impact within our region and international and global investors,” IDB Invest’s Jan Petter Eskildsen told ImpactAlpha.
- Climate fellows. Rockefeller Foundation’s Natalye Paquin touted investments in Mombak, an Amazon reforestation fund, and CHAI, which uses predictive modeling to stem malaria in Honduras and other Latin American countries. She introduced the foundation’s “15 big bets” climate fellows, including Erika Berenger in Brazil (avoiding forest fires), Marcela Angel in Colombia (early warning for landslides) and Elena Martínez in the Dominican Republic (seaweed harvesting). “Investing in multipliers like these fellows is the best way to slow and reverse the climate crisis,” said Paquin.
- Adaptation. Madrid-based Gawa Capital has secured more than €150 million ($166 million) for its €300 million Kuali Fund, a climate…
Read More: New impact investing funds and catalytic capitals in Latin America
