NJFuture Redevelopment Forum 2015 Trelstad

I

New Thinking for New Outcomes:

Achieving Multiple Bottom Lines

Reuben Teague, Director-Impact Investing, Prudential Financial

Shalini Vajjhala, Founder & Chief Executive Officer, re:focus partners

Brian Trelstad, Partner, Bridges Ventures (Moderator)

NJ Future Redevelopment Forum

March 13, 2015

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Rise of Sustainable and Impact Investing

2


http://www.businessweek.com/articles/2014-08-21/bain-capital-buys-toms-the-625-million-do-gooder-shoe-company


3


http://www.nytimes.com/2014/09/06/your-money/asset-allocation/investing-to-make-a-difference-is-gaining-ground-.html




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http://www.ft.com/intl/cms/s/0/b1cf7c0e-8572-11e1-a75a-00144feab49a.html


5


http://www.forbes.com/sites/devinthorpe/2014/07/22/prudential-promises-to-build-1-billion-impact-portfolio/








6








http://www.marketwatch.com/story/kkr-releases-environmental-social-and-governance-esg-reportdemonstrating-responsible-investment-is-a-growing-part-of-value-creation-2014-07-10




7




http://www.bloomberg.com/news/2014-09-15/morgan-stanley-adds-impact-portfolios-in-brokerage.html










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https://twitter.com/mattbish/status/481827676551122944










10


http://www.weforum.org/reports/charting-course-how-mainstream-investors-can-design-visionary-and-pragmatic-impact-investing
















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http://www.socialimpactinvestment.org/
















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http://www.nabimpactinvesting.org/

http://www.nabimpactinvesting.org/















March 10, 2015: Just Another Day at New Jersey Future

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Investments from “impact

investment groups” at Prudential,

Goldman Sachs with NJEDA grant


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Farmland LP and Working Farms

Capital are new funds investing in

sustainable agriculture


16




Farmland LP and Working Farms

Capital are new funds investing in

sustainable agriculture

New wind finance funds are being

raised all over the US that offer

attractive fixed income returns


17


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Jack & Jakes part of a new wave

of post-Katrina Impact Investing


19

Jack & Jakes part of a new wave

of post-Katrina Impact Investing

Green infrastructure funds being

raised for NYC and other cities


Impact Investments…

… are investments made into companies, organizations, and funds with the intention

to generate measurable social and environmental impact alongside a financial return.

The Global Impact Investment Network, 2009

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24

Traditional Philanthropy

Finance-only Impact-only

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

Examples

Focus

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant

Impact Investing sits within a “Spectrum of Capital”

Traditional Responsible Philanthropy


Focus on

ESG risksPure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

• Ethically-

screened

investment

fund

Examples

Focus

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant


Traditional Responsible Impact-first Philanthropy


Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

• Ethically-

screened

investment

fund

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant


Traditional Responsible Sustainable Impact-first Philanthropy


Focus on

ESG

opportunity

Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

• Ethically-

screened

investment

fund

• Long-only

public equity

fund

integrating

ESG

analysis

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant


Traditional Responsible Sustainable Thematic Impact-first Philanthropy


Focus on

ESG

opportunity

Focus on

issue areas

where need

creates a

commercial

opportunity

Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

• Ethically-

screened

investment

fund

• Long-only

public equity

fund

integrating

ESG

analysis

• Clean energy

fund

• Emerging

markets

healthcare

fund

• Microfinance

debt fund

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant




Focus on

ESG

opportunity

Focus on

issue areas

where need

creates a

commercial

opportunity

Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

• Ethically-

screened

investment

fund

• Long-only

public equity

fund

integrating

ESG

analysis

• Clean energy

fund

• Emerging

markets

healthcare

fund

• Microfinance

debt fund

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

Impact Investing

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant




Focus on

ESG

opportunity

Focus on

issue areas

where need

creates a

commercial

opportunity

Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

Competitive returns

• Ethically-

screened

investment

fund

• Long-only

public equity

fund

integrating

ESG

analysis

• Clean energy

fund

• Emerging

markets

healthcare

fund

• Microfinance

debt fund

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

Impact Investing

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant




Focus on

ESG

opportunity

Focus on

issue areas

where need

creates a

commercial

opportunity

Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

Competitive returns

High-impact solutions

• Ethically-

screened

investment

fund

• Long-only

public equity

fund

integrating

ESG

analysis

• Clean energy

fund

• Emerging

markets

healthcare

fund

• Microfinance

debt fund

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

Impact Investing

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant



Finance-only Impact-onlyThe New Paradigm

Focus on

ESG

opportunity

Focus on

issue areas

where need

creates a

commercial

opportunity

Focus on

ESG risks

Focus on

issue areas

where need

requires

partial

financial

trade-off or

subsidy

Pure

fiduciary

focus

Focus on

an issue

area where

need

requires

100%

financial

trade-off

Competitive returns

High-impact solutions

• Ethically-

screened

investment

fund

• Long-only

public equity

fund

integrating

ESG

analysis

• Clean energy

fund

• Emerging

markets

healthcare

fund

• Microfinance

debt fund

• CDFIs and

affordable

housing

• RWJF

“program

related

investment”

Examples

Focus

Impact Investing

• Princeton

University

Endowment

• RWJF

Endowment

• Grants to

operating

non-profits

• RWJF

grant


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There has been an explosion of players in the last decade

Source: Accelerating Impact, a report prepared by E.T. Jackson and Associates and commissioned by The Rockefeller Foundation

2012

Hearing from two leading practitioners

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REUBEN TEAGUE

Director, Social Investments Program, Prudential Financial, Inc.

Reuben Teague is responsible for sourcing, underwriting and managing

investments that meet Prudential’s social value criteria while providing risk-

adjusted financial returns. The Social Investments Program manages a portfolio of

more than $300 million in investments and typically originates between $50 million

and $75 million in transactions annually.

SHALINI VAJJHALA

Founder and Chief Executive Officer, re:focus partners

Re:focus partners operates as a social entrepreneur, designing integrated, resilient

infrastructure systems and developing new public-private partnerships to align

public funds and leverage private investment for vulnerable communities around

the world.

NJFuture Redevelopment Forum 2015 Trelstad

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