A broad group of impact investing networks supported by several foundations has created a coalition to leverage their combined expertise and capital, and to speed up the information flow on financing needs, to tackle many of the consequences that have surfaced from the coronavirus pandemic.
The Response, Recovery, and Resilience Investment Coalition (R3 Coalition), will “drive collaboration” among impact investors, and will seek to “identify opportunities where investment capital can be put to work,” says Amit Bouri, co-founder and CEO of the Global Impact Investing Network (GIIN), which is managing the coalition.
“There was a broad recognition that we had a unique and unprecedented global crisis that required a unique and global response,” Bouri says.
R3’s focus is threefold: to surface impact investment opportunities, especially related to health interventions; to identify and fill financing gaps, coordinating efforts among investors to fund “high-impact solutions”; and to facilitate knowledge sharing, which will spur future economic recovery and resilience, the GIIN said in a statement.
While the near-term focus is on responding to the pandemic, “shaping a more inclusive and more sustainable recovery coming out of this crisis is going to be really important,” Bouri says. “Also, how do we build in more resilience to the overall system—not just from a public health standpoint, but also looking at food and agriculture systems, and more resilience in our economic system.”
There was a broad recognition that we had a unique and unprecedented global crisis that required a unique and global response,
More immediately, the coalition will give impact investors resources to turn to when evaluating deals in areas where they have less expertise. Members of Toniic, a network of about 400 high-net-worth individuals, family offices, and foundation asset owners, have been deluged with opportunities that in some cases have been difficult to evaluate, says Adam Bendell, CEO of Toniic, which is part of the coalition’s initial partner network.
For example, a company working on developing a drug for disease other than the novel coronavirus approached investors saying that the drug has shown promise against coronaviruses, and is likely to be effective in treating Covid-19, Bendell says. This company is looking for a quick round of funding so it can pursue fast-track approval by the U.S. Food and Drug Administration.
Toniic members, however, “didn’t have the expertise” to evaluate the company’s claims. What the coalition will do, Bendell says, is assemble technical experts who can serve as resources and a clearing ground for investors who want to put money to work effectively.
The coalition also will be helpful in curating a list of investment opportunities, by identifying, vetting them, and performing due diligence, as well as finding co-investors, he says—“all the stages from initial ideation to deploying capital and delivering direct outcomes, which is what motivates our members.”
For Synergos, a global network of philanthropists and impact investors founded by David Rockefeller’s daughter Peggy Dulany, the current chair, the coalition will give visibility to members on how they can potentially invest not just in the response, but “in our resurgence,” says Marilia Bezerra, managing director at Synergos’ Global Philanthropists Circle.
Members of Synergos, which is also in the coalition’s partner network, want to invest “in building the kind of economy we want to have in the future, to not go back to what it was,” Bezerra says. “Impact investments, alongside philanthropy, is an essential mechanism for positive transformation.”
The R3 Coalition will be valuable, she adds, as it will “expand the visibility of our members on the kinds of opportunities they can step into right now.” And it will allow them to lean on their peers. “If an investor is in on a deal or doing due diligence, they will have a lot to share. That will be very valuable for investors to learn from.”
While governments around the world are taking a leading role in responding to the public health crisis, and providing economic stimulus, there are still “targeted needs for investment that we want to make sure get seen as soon as possible and get in front of the right investors who have the ability to actually meet those financing gaps,” the GIIN’s Bouri says.
For instance, development finance institutions—which typically are backed by governments, and have “decades long” experience originating deals in a variety of sectors in places like sub-Saharan Africa, Asia, and Latin America, are “surfacing financing needs and investment opportunities that are likely bigger than they can finance on their own,” he says.
Initially, the coalition’s focus will be on “response,” with a focus on health care. Although Bendell at Toniic says most of the conversations in the impact investing community have been on the disproportionate way the crisis has affected the poor, working class, and middle class.
So “that’s the tension” of the coalition now—“to keep it sufficiently focused on the center of the bullseye, but also to take into account the fact that the economic effects are going to last longer than the health effects and will have disproportionate impacts on the population,” Bendell says.
The partner networks involved in the R3 Coalition also include Aspen Network of Development Entrepreneurs, B Lab (U.S./Canada), EDFI-Association of European Development Finance Institutions, and India Impact Investors Council. The coalition is financially backed by several foundations, including the David and Lucile Packard Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Open Society Foundation, The Rockefeller Foundation, and the Sorenson Impact Foundation.