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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

Root Capital

Total Assets Under Management: $50 – 99M
Asset Class: Cash / Cash Alternatives, Private Debt - Absolute Return / Notes
Primary UN Sustainable Development Goal: 1 – No Poverty
Fair Trade
Sustainable Agriculture

Firm Overview

Category: Private Debt - Smallholder Farmers

Root Capital is a nonprofit with a mission to serve agricultural businesses that connect smallholder farmers to world markets. Our approach includes lending capital, delivering financial and other client relevant trainings, and strengthening market connections for small and growing agricultural businesses. Over the past two decades, Root Capital has cumulatively loaned more than $1.2 billion to over 700 businesses reaching more than 1.3 million farm families (6 million people) and provided training to over 1,300 businesses. As a result, Root Capital has contributed more than $6 billion in revenue for our clients with more than 80 percent of that being paid directly to smallholder farmers.  

Firm Headquarters: US & Canada
Years of Operation: 10 years or more
Total Assets Under Management:
$50 – 99M
Total Number of Investors: More than 25
% of Capital from Top 3 Investors: 25% – 49%
Investment Thesis:

Root Capital invests in the growth of agricultural enterprises in rural, environmentally vulnerable places in Africa, Latin America and Indonesia, so that the businesses become engines of impact that transform their communities by increasing incomes, creating jobs, preserving ecosystems, empowering women and giving young people the opportunity to lead.

Investment Overview:

Root Capital invests in the growth of agricultural enterprises so that they can transform rural communities. These businesses purchase crops such as coffee, cocoa or grains from smallholder farmers. With growth, they become engines of impact that can raise incomes, create jobs,, empower women and young people, sustain peace and preserve vulnerable ecosystems.  

We provide loans, deliver training and strengthen market connections for small and growing agricultural businesses. We place capital where it's needed most: in the businesses at the end of the dirt have the hardest time accessing the resources they need to grow, but have the greatest potential for impact. We've learned to lend wisely, without losing focus on where we can have the greatest effect. We blend philanthropic and borrowed capital in order to supply these businesses with critical resources: access to credit, trade and technical partners and essential training in business skills and conservation practices.

Company Differentiator:

At the highest level, Root Capital seeks to lead in shaping the market for smallholder finance such that it fully integrates social and environmental impact alongside financial risk and return. This builds upon our field building and sector leadership in recent years: namely we co-founded the recognized leader of the Council on Smallholder Agricultural Finance, an alliance of 12 financial institutions that lend to agricultural businesses in emerging markets.

As a direct service provider, we have one of the longest track records in this peer group with 20 years. We sek to push the frontier and reach high-impact agricultural businesses that are the hardest to serve. We also provide them with what they need to grow which is the combination of financing augmented with advisory services that strengthen and support those businesses to a point of resilience.  

Investment Example

Selecto Exporters was founded in 2005—not an easy time to start a business in Colombia. The decades-long civil conflict continued to claim lives, and a formal peace agreement would not be signed for another eleven years. The conflict took place predominantly in rural communities, turning farms into battlefields and forcing many to flee to cities. With little infrastructure for exporting coffee from many of these regions, those who stayed were forced to farm coca for the cartels and rebel groups to refine into cocaine.  

While other coffee businesses weathered the conflict by buying from private coffee estates located in relatively secure areas, Selecto set out to have a positive impact on the hardest-hit communities. Over the last three years, we have provided Selecto with $3.4M in financing to support their operations in the vulnerable regions of southern Colombia. Selecto uses this working capital to buy coffee from farmer-led organizations—ensuring on-time payments to producers—then sells directly to international buyers with a particular focus on organic and

Fair Trade coffee. These certified coffees carry with them premium prices that raise incomes, meaning farmers don’t need to leave their homes or resort to coca to survive.

With our help, Selecto is providing thousands of farmers in post-conflict Colombia with the economic opportunity they need to rebuild their communities and their lives.

Leadership and Team

Cumulative Leadership Experience in Investing:
30 years or more
Cumulative Impact Experience of Top Three Firm Leaders:
20 – 29 years
Willy Foote – Founder and CEO More Info

Willy Foote is founder and CEO of Root Capital, a nonprofit impact investor that offers farmers around the world a path to prosperity by investing in the agricultural businesses that serve as engines of impact in their communities. Root Capital provides these businesses with the capital, training, and access to markets they need in order to grow, thrive, and create opportunities for thousands of farmers at a time. Since its founding in 1999, Root Capital has provided more than $1 billion in loans to 630 agricultural businesses in Africa, Asia, and Latin America. Together, these businesses have generated more than $6 billion in revenue, 80 percent of which has been paid directly to the 1.2 million smallholder farmers whose crops they collect and market.

Frances Reid – Chief Operating Officer More Info

I joined Root Capital from the CDC Group in London where I served as the Chief Investment Officer and Managing Director for Investment Risk and Analytics from 2014 to 2019. In that role I chaired the Investment Committee, managed the investment decision-making process, and conducted “deep dives” into risk identification and management. I also headed the Analytics and Development Impact Teams to design and apply analytics tools across the organization and assess the impact investment program. Before that, I spent 40 years working in finance at nearly all levels of management in both the private and public sectors, including as a program director at the European Bank for Reconstruction and Development, CIO at the Millennium Challenge Corporation, Senior Adviser to the Undersecretary of the US Treasury for International Affairs, and Managing Director at Lehman Brothers and COO of Lehman/American Express Global Asset Management.

Steve Nocka – Chief Lending Officer More Info

I joined Root Capital after several years at Bank of America Merrill Lynch, where, as Managing Director from 2011 to 2018, I was responsible for risk, operations, and revenue management for the global trade and supply chain business, working with a global team across nine offices. In more than 25 years at Bank of America and its predecessor firms, I served in diverse leadership roles. From 1992 to 2007, I focused on nonprofit lending and played a central role in building out a national practice around the education and religious sectors. I then moved to London to act as co-head of a mid-cap corporate lending team, and subsequently Head of Corporate Credit for Bank of America’s corporate and investment bank in Europe, the Middle East, and Africa from 2008 to 2011.

Percentage of Investment Professionals who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
25% to less than 50%
Percentage of Management Team who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
50% or more

Financial Performance

Target Financial Returns Relative to Benchmark:
Concessionary Rates
Actual Performance Relative to Target Financial Returns in the Past Three Years:
In line with 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:
Addressing climate change and environmental issues
Alleviating poverty
Creating jobs
Increasing access to financial services
Secondary Impact Outcomes:
Conserving land, ecosystems and natural resources
Value-added Services Offered:
Access to markets
Other: Advisory management training in financial management, agronomics, use of mobile collection methodology and other trainings relevant to our clients' needs.

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

We asses the businesses we lend to on their financial viability as well as social environmental impact. We target early-stage businesses who often are unable to secure financing from other commercial lenders due to their small size, lack of collateral, limited managerial experience and perceived risk. Our clients generally operate in areas in which individuals live below $4 per day or even $2.50 in Africa. We seek to serve businesses that will improve livelihoods of individuals in the following ways:

  • Paying higher prices relative to the local market, 
  • Giving farmers access to agronomic assistance and inputs and credit to invest in their farms
  • Supporting community initiatives in education, health and infrastructure
  • Supporting Women led/owned businesses through our Women in Agriculture Initiative (WAI)


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

We seek to invest in small and growing agricultural businesses that value environmental stewardship and build sustainable livelihoods in local communities. As part of the credit evaluation process for each business, Root Capital's loan officers use our proprietary social and environmental scorecards in order to evaluate the business's social and environmental practices and impact. These tools include metrics developed by the Impact Reporting and Investment Standards (IRIS), a subset of which we report in our Quarterly Performance Reports and online Performance Dashboard. As part of our underwriting process, we are conducting an in-depth analysis of the context in which the business is operating from poverty levels to climate change hotspots as well as the social and environmental practices that the business conducts.

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

Learn More

Key Contact Name: Jean Forrester
Phone: (617) 299-2451
Mailing Address:

130 Bishop Allen Drive, 2nd floor, Cambridge, MA 02139

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