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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

WaterEquity, Inc.

Total Assets Under Management: $50 – 99M
Asset Class: Private Debt - Absolute Return / Notes
Primary UN Sustainable Development Goal: 6 – Clean Water & Sanitation
Water and Sanitation
Small/Medium Business Development
Microfinance/Insurance & Financial Services

Firm Overview

Category: Private Debt - Microfinance

WaterEquity is the first-ever asset manager exclusively focused on solving the global water crisis. Founded on the vision of social entrepreneurs Gary White and Matt Damon of Water.org, WaterEquity builds on 20+ years of experience in water and sanitation microfinance in emerging markets. WaterEquity’s funds invest in a portfolio of high-performing financial institutions and enterprises in emerging markets to deliver access to safe water supply and sanitation to families living in poverty. To date, WaterEquity’s funds have reached more than one million people with access to safe water or sanitation. 

Firm Headquarters: US & Canada
Years of Operation: 5 – 9 years
Total Assets Under Management:
$50 – 99M
Total Number of Investors: More than 25
% of Capital from Top 3 Investors: 50% – 99%
Investment Thesis:

Lack of financing is the biggest barrier to ending the global water crisis. By supporting financial institutions and enterprises that finance or provide water and sanitation products and services, WaterEquity accelerates universal access to safe water and sanitation for millions of men, women, and children. 

Investment Overview:

A large-scale demand for safe water and sanitation exists among people living in poverty in emerging markets. A lack of affordable financing is the key barrier preventing individuals from securing safe water or sanitation and local enterprises from delivering it.

Demand from individuals: There is an $18 billion market demand from individuals for affordable financing to meet their water and sanitation needs, equating to 800 million people. 

Demand from water and sanitation enterprises: 55-68 percent of small and medium enterprises in emerging markets are either unserved or underserved by financial institutions. 

We believe that capital, wisely invested, can address this demand and accelerate access to safe water and sanitation for all. We invest in financial institutions and enterprises that have significant capacity for scale, a strong financial track record, and a deep reach into underserved communities. 

Company Differentiator:

WaterEquity’s extensive knowledge of the water and sanitation space and its deep financial experience sets it apart from other impact investment managers. The Investment Management team has decades of banking and microfinance experience and an unparalleled understanding of the water and sanitation sector. This unique combination enables WaterEquity to identify investment opportunities with an attractive mix of financial returns and social impact. In addition, WaterEquity’s founding organization, Water.org, has partnered with more than 125 financial institutions in 13 countries, providing those institutions with philanthropic capital to cover the start-up costs of launching a water and sanitation micro-loan portfolio. WaterEquity leverages Water.org’s track record by investing in these institutions, thereby accelerating economies of scale and addressing the massive demand for affordable water and sanitation financing.

Investment Example

Based in Odisha, India, Adhikar is a microfinance institution that provides sustainable financial services for social and economic empowerment to women and their families, with a focus on rural communities living in poverty. Adhikar launched its water supply and sanitation micro-loan portfolio in 2012, helping clients secure financing for household toilets, piped water connections, and water filters. Adhikar has demonstrated organizational commitment to its water and sanitation portfolio, built strong relationships with local government agencies involved in water management, and developed well-designed and competitively priced micro-loan products. To enable Adhikar to scale their water and sanitation micro-loan portfolio among families living in poverty, WaterEquity extended a $370,000 three-year loan with a target to reach over 10,000 women and their families with safe water or sanitation. In the first few months post-disbursement, Adhikar more than doubled the size of their water and sanitation portfolio, and they project it will quadruple by 2022.

Leadership and Team

Cumulative Leadership Experience in Investing:
30 years or more
Cumulative Impact Experience of Top Three Firm Leaders:
30 years or more
Gary White – Chief Executive Officer More Info

Gary White manages the overall operations of WaterEquity, bringing 25 years of experience in sustainable innovation in water and sanitation. In addition to founding and leading WaterEquity, Gary is the Chief Executive Officer and Co-founder of Water.org, a nonprofit organization that harnesses philanthropy to empower people in the developing world to gain access to safe water and sanitation. (Water.org is the resulting organization of the July 2009 merger between WaterPartners, co-founded by Gary in 1990, and H2O Africa, co-founded by actor Matt Damon). He developed Water.org’s WaterCredit Initiative, creating new financing options for families living in poverty to meet their water and sanitation needs.

Dr. Paul O’Connell – Managing Director More Info

Dr. Paul O’Connell manages WaterEquity’s day-to-day activities. He brings 25 years of experience in the research and practice of international finance and asset management to the organization. Prior to joining WaterEquity, he spent more than 20 years as President and Managing Partner of FDO Partners, LLC, managing currency and equity portfolios for sovereign wealth funds, pension funds, and other institutional investors. His research interests include exchange rate behavior, international capital flows, and labor migration, and he has published a number of papers on these topics. He served as a member of the Editorial Board of the Emerging Markets Review, and the Review Board for the Research Foundation of the CFA Institute.

Alix Lebec – Chief Investor Relations Officer More Info

Alix Lebec oversees WaterEquity’s business development, investor relations, and marketing strategy and execution with 15 years of international experience. As a member of the Executive Leadership team, Alix Lebec supervises WaterEquity’s investment and philanthropic capital raising strategy and execution, along with communications and marketing efforts. A founding member of WaterEquity, Alix co-developed the blueprint for the organization and its compelling fund offerings with a focus on defining the specific value proposition for philanthropists and impact investors.

Percentage of Investment Professionals who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
50% or more
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:
Market 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:
Increasing access to financial services
Increasing access to water and sanitation
Other: Gender-lens investing; Sustainable impact
Secondary Impact Outcomes:
Addressing climate change and environmental issues
Alleviating poverty
Increasing access to education and improving educational outcomes
Increasing access to healthcare services and improving health
Value-added Services Offered:
Access to markets
Business and legal training
Financial literacy training

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

WaterEquity provides debt financing to financial institutions, including microfinance institutions, and enterprises dedicated to increasing access to water supply and sanitation products, services, and/or financing among households living in poverty. Investments seek to achieve maximum social impact while simultaneously generating positive financial return. In order to become eligible for a WaterEquity investment, a candidate must be willing and capable of dedicating 100 percent of capital to expanding access to safe water and sanitation products, services, or financing in a target country. Each loan agreement WaterEquity enters into includes specific water supply and sanitation impact targets in its covenants. During monitoring, WaterEquity collects quarterly impact data from borrowers and tracks progress against these targets.

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

WaterEquity invests in financial institutions, including microfinance institutions, and enterprises that support the achievement of Sustainable Development Goal 6 (universal access to water and sanitation) and are committed to sustainable and equitable environmental, social, and governance (ESG) practices. ESG terms (in accordance with WaterEquity’s ESG policy) are negotiated and incorporated into the legal investment agreements, as appropriate. Alternatively or additionally, WaterEquity incorporates ESG action plans, targets, and reporting requirements into management’s ongoing key performance indicators. All borrowers sign an ESG certificate certifying that the enterprise, as well as its directors, officers, and affiliates, complies with WaterEquity’s specific ESG requirements. In cases where candidates do not have acceptable ESG risk levels and are unwilling to agree to action plans to close ESG performance gaps, WaterEquity will not invest.

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: Laney Beaman
Mailing Address:

1828 Walnut Street, Floor 3, Kansas City, MO 64108

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