IMPACTASSETS 50™

An Annual Showcase of Impact Investment Fund Managers

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An Annual Showcase of Impact Investment Fund Managers

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ImpactAssets 50: A Global Landscape of Impact Investment Fund Managers
The ImpactAssets 50 (IA 50) is the first open-source, publicly published database of experienced private debt and equity impact investment fund managers.
https://www.impactassets.org/impactassets-50

ImpactAssets 50

An Annual Showcase of Impact Investment Fund Managers

IA 50 2022 PROFILE

REDF Impact Investing Fund

Total Assets Under Management: Less than $25M
Asset Class: Private Debt - Absolute Return / Notes
Primary UN Sustainable Development Goal: 8 – Decent Work & Economic Growth
Small/Medium Business Development
Diversity, Equity and Inclusion

Firm Overview

Category: Private Debt - Non-profit/NGO Finance

REDF began nearly 25 years ago as a venture philanthropy investing exclusively in what we call “employment social enterprises”: small businesses whose focus is to create jobs for people who face significant and often structural barriers to employment like poverty, homelessness, and involvement with the justice system. Our formula is simple: with flexible capital and curated capacity building services, social enterprises can get the resources and learning community they need to catalyze their next stage of growth - and create more jobs for overlooked talent throughout our country - in the process. In 2019, we expanded our offerings to include much-needed impact loans through the REDF Impact Investing Fund, a 501(c)(3) debt fund designed to provide social entrepreneurs smart loans and the technical assistance to repay them. Our fund seeks to improve the financial sustainability of these enterprises, particularly those led by people of color and people with lived experience.  

Firm Headquarters: US & Canada
Years of Operation: Less than 3 years
Total Assets Under Management:
Less than $25M
Total Number of Investors: Between 5 – 25
% of Capital from Top 3 Investors: 25% – 49%
Investment Thesis:

We build investment potential with social enterprise leaders whose experience is their collateral, by providing them with flexible capital and capacity building support to grow their creditworthiness and, in so doing, bend the narrative of what and who is “worthy” of investment towards leaders whose talent has been historically overlooked.

Investment Overview:

Of the “five c’s of credit”, “character” is least codified and often fails to include the decisions and opportunities that speak to the content of one’s character and the voracity of their word. Our thesis: If we build the investment potential of leaders whose experience is their collateral, we accelerate the employment of overlooked talent that becomes possible as a result. After two decades, we know these leaders are more passionate about their business because they know what it feels like to face systemic barriers to employment and want nothing more than to ensure others behind them succeed. Leaders who have faced employment barriers themselves have more employee loyalty and retention and better financial performance of the business. Their success helps other impact investors to see what we see: an untapped pool of eligible borrowers who are generating employment for an untapped pool of talent in this country.  

Company Differentiator:

RIIF’s primary differentiators are our non-traditional risk assessment criteria, flexible loan structures and terms, and integration of technical assistance (to promote business growth and improve financial management) as core to our partnership. Our underwriting considers traditional credit-rating principles but also acknowledges the value of lived experience and community connections in mitigating risk and assessing a borrower’s ability to repay a loan. We seek to build financial sustainability for borrowers who have been impacted by the financial sector’s inequitable distribution of credit, and build assets and net worth for businesses run by people of color and those who have experienced barriers to employment. With a model of “smart loans and the technical assistance needed to repay them”, each borrower will have the opportunity to receive at least one targeted capacity building engagement executed by an expert consultant over the term of the loan, to build their investability over time.  

Investment Example

RIIF provided a $200,000 working capital loan to Working Fields, a Vermont staffing company which employs individuals in recovery from substance abuse and individuals who have been formerly incarcerated. The loan will fund key hires and capital investments to expand the business to 10 locations and meet increased demand for temporary workers, resulting in jobs for more than 300 people annually. Led by a CEO in recovery, Working Fields also provides wraparound support and a community of recovery-friendly workplaces to ensure employees have the resources to sustain their jobs over the long-term.  The loan term is 6 years with the first 18 months interest-only, then 4.5 years fully amortizing, with a fixed interest rate of 7.00%. The loan is secured by a first position lien on business assets, and the borrower will fund a $50k debt service reserve during interest only period to mitigate repayment risk. 

Leadership and Team

Cumulative Leadership Experience in Investing:
20 – 29 years
Cumulative Impact Experience of Top Three Firm Leaders:
10 – 19 years
Maria Kim – President More Info

Maria joined as President in June 2021 (in a role she describes as her “dream job”), after 15 years at Cara Collective – a social enterprise on the move to eradicate relational and financial poverty. At Cara, Maria helped to deepen its impact for thousands of Chicagoans from untapped talent pools, while bringing its services to a national stage – expanding both its footprint and its influence to practitioners and employers alike in their collective journey to fueling a more inclusive economy.

Carrie McKellogg – Chief Executive Officer More Info

Chief Program Officer Carrie McKellogg is responsible for implementing REDF’s strategic plan to significantly grow and support the social enterprise sector to employ 50,000 people nationwide by 2020. Carrie works closely with staff and stakeholders of the organization to expand REDF’s funding and business advisory services nationwide to serve growing employment social enterprises and the people they employ. Carrie also serves as the CEO of the REDF Impact Investing Fund.

Emilie Linick – Director of Impact Lending More Info

Emilie Linick is responsible for directing and growing REDF’s Impact Lending practice. She develops REDF’s short and long-term lending strategy, identifies partnership opportunities, and leads the functions of business development, loan originations, and portfolio risk management, all with a strong customer focus. Emilie enjoys working with REDF’s borrowers and developing innovative and flexible solutions to meet their financing needs for growth.

Percentage of Investment Professionals who identify as women:
50% or more
Percentage of Investment Professionals who identify as a person of color:*
25% to less than 50%
Percentage of Senior Management Team who identify as women:
50% or more
Percentage of Senior Management Team who identify as a person of color:*
Less than 25%
*People of color include: Black, Latinx, Asian, Native American/Alaskan Native, Pacific Islander, Middle Easterm and multi-racial Americans

Financial Performance

Target Financial Returns Relative to Benchmark:
Near-market Rates
Actual Performance Relative to Target Financial Returns in the Past Three Years:
Over-delivered compared to initial target returns
Financial Reporting Frequency to Investors or Donors
Quarterly

Impact Performance

Percentage of Total Assets Under
Management that are Impact Investments:
100%
Primary Impact Outcomes:
Creating jobs
Addressing Racial Inequality
Secondary Impact Outcomes:
Alleviating poverty
Value-added Services Offered:
Access to markets
Business and legal training
Racial bias training

Investments systematically target companies where social and/or environmental impact is integral to the product/service being created:

We exclusively lend to businesses that are creating and providing supportive jobs for low-income individuals who have experienced significant barriers to work including unstable housing, justice-system involvement, addiction, young people disconnected from work and school, refugees, and victims of domestic violence. These companies reinvest profits into the enterprise to provide greater support to individuals transitioning back into the workforce.  

Investments systematically include social and environmental sustainability practices in the due diligence process:

RIIF’s diligence begins with an assessment of the borrower’s mission - providing supported transitional employment and permanent “good jobs” to employees. We conduct an annual programmatic survey of borrowers around the types of support provided (e.g. case management, transportation support, etc.), and through participation in a peer community of practitioners, offer borrowers training, networking, and partnership opportunities to improve employee outcomes in terms of job retention, income, and upskilling opportunities.  

Impact Tracking and Monitoring

Impact is Tracked:
Yes
Social and/or Environmental Impact is Reported to Investors and Donors:
Yes – to the public
Third Party Validations:
Participant on steering committees or leadership roles within impact industry associations
Publisher or contributor to industry white paper or other research in impact investing
None

Learn More

Key Contact Name: Carrie McKellogg
Phone: (415) 510-6019
Mailing Address:

801 S. Grand Avenue Suite 725, Los Angeles, CA 90017, USA

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