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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 2021 PROFILE

Maycomb Capital

Total Assets Under Management: $50 – 99M
Asset Class: Private Debt - Absolute Return / Notes, Private Equity
Primary UN Sustainable Development Goal: 1 – No Poverty
Nutrition, Health and Wellness
Education

Firm Overview

Category: Private Debt - Other

Maycomb Capital is an impact investing platform with funds that provide financing across asset classes to support strategies that transform communities. The Community Outcomes Fund provides outcomes financing—sometimes known as Pay for Success—that enables government to realign funding with evidence-based solutions to social challenges. The Community Outcomes Fund is one of Maycomb Capital’s flagship funds. Our approach is informed by deep expertise in finance, entrepreneurship and social justice. Co-founders Andi Phillips and Liz Luckett, both experienced investment professionals with diverse backgrounds, joined forces to address market gaps in impact investing.  Maycomb is named for Maycomb County, the setting of Harper Lee’s classic novel To Kill a Mockingbird. Lee used Maycomb, a fictional district in Depression-era Alabama, as a backdrop for her universal story of the pursuit of justice, which sparked conversations about equity that resonate today. Maycomb Capital was formed to continue this dialogue, bringing innovative investment solutions into action. 

Firm Headquarters: US & Canada
Years of Operation: 3 – 4 years
Total Assets Under Management:
$50 – 99M
Total Number of Investors: Between 5 – 25
% of Capital from Top 3 Investors: 50% – 99%
Investment Thesis:

Outcomes financing—sometimes called Pay For Success—has emerged as a promising way for local governments to fund what works and improve access to economic opportunity for disadvantaged communities. The Fund invests in these next generation public-private partnerships that scale the delivery of high-impact services, where investor returns are aligned with impact.

Investment Overview:

In communities across the country, social challenges persist while resources remain stagnant or may decline. Today, more than ever, governments must find ways to smartly spend scarce dollars. Outcomes financing-sometimes called Pay For Success-has emerged as a promising way for local governments to fund what works and improve outcomes for disadvantaged communities. The Community Outcomes Fund invests in these next generation public-private partnerships that leverage private dollars to fund the delivery of high-impact services, where investors are repaid with a return based on the program achieving agreed upon outcomes. At the local level, the Fund's investments are driving dollars into evidence-based services that measurably improve economic, social, educational, and health outcomes in low-income communities. Nationally, the Fund's investments facilitate a meaningful shift in public policy to align funding with community outcomes. 

Company Differentiator:

Size: The largest in the United States, $53 million in investor capital and a $10 million guaranty.

Deal Pipeline: A strong national network for non-profit and for-profit human services providers, such as workforce development organizations and early childhood education organizations, as well as a strong network of policymakers and government officials interested in aligning public spending with impact in their communities.

Diversification and mitigated risk: We expect to continue to invest the Fund across multiple issue areas and geographies. Additionally, Class-A non-foundation investors benefit from a 20% first-loss guarantee at the fund level from the Kresge Foundation.

Expert leadership: The Fund is led by an impact investor with over 25 years of experience and has been a leader in outcomes financing.

Ability to drive market standards and efficiencies: As a repeat player, the Fund has the capability to standardize and accelerate deal underwriting and negotiation processes, decrease transaction costs, and simplify counterparty complexity for governments.

Advice of thought leaders: The Fund has access to thought leaders and issue area experts with backgrounds across impact investing, public policy, and government innovation. 

Investment Example

Memphis and Shelby County Pre-K Project: This project financed 1,000 seats of high-quality pre-k for low-income four-year olds. The project manager was First 8 Memphis, a local nonprofit focused on improving outcomes for children ages 0 to 8. The City of Memphis and Shelby County appropriated funding, which will be paid based on outcomes including Kindergarten readiness and improvements in pre-literacy skills. The Urban Child Institute co-invested alongside the Community Outcomes Fund. Research shows that high-quality early childhood education is a critical and effective strategy for improving educational and health outcomes later in life, returning as much as $7 for every dollar spent. In this case, the pre-k program is built on state-level and national best practices for high-quality pre-k, including two-generational support for the students’ families as well as professional development opportunities for teachers and staff. 

Leadership and Team

Cumulative Leadership Experience in Investing:
30 years or more
Cumulative Impact Experience of Top Three Firm Leaders:
30 years or more
Andrea Phillips – Managing Partner More Info

Andi Phillips has over 25 years of experience leading, designing and implementing large scale, public private partnerships that leverage private investment to address pressing social challenges. At Goldman Sachs, she launched and managed the Goldman Sachs Social Impact Fund and led signature social impact bond investments for the firm including the investment in the Rikers Island Social Impact Bond, the first such transaction ever executed by a financial institution and in the U.S. market. Previously, Ms. Phillips was president of the Community Development Financing Institution (“CDFI”), Seedco Financial, which provided affordable capital to small businesses and nonprofits in disadvantaged communities. At Seedco, Andi also managed performance-based contracts in workforce development, totaling over $100 million. Ms. Phillips holds a BA from Tufts University and an MPP from the Harvard Kennedy School of Government.

Percentage of Investment Professionals who identify as women:
50% or more
Percentage of Investment Professionals who identify as a person of color:*
Less than 25%
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:
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:
Alleviating poverty
Increasing access to education and improving educational outcomes
Increasing access to healthcare services and improving health
Other: Increasing access to workforce development services that support access to better quality jobs for the un- and under-employed
Secondary Impact Outcomes:
Addressing Racial Inequality
Addressing Gender Inequality
Value-added Services Offered:
Other: The team works closely with project partners to understand how outcomes financing works, to provide the necessary technical assistance including developing financial models and structuring.

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

The structure of outcomes financing links social and educational outcomes with financial return. The repayment of the investment relies on the cashflows that are tied to outcomes. We diligence impact on a deal-by-deal-basis, in some cases including a third-party expert, to ensure outcome metrics tie to best practices and the highest impact standards. As a result, the Fund ensures that its financial returns move in tandem with success on impact.  In instances where our investments are financing services that primarily serve people of color, our due diligence analyzes the intervention using a racial equity lens. In particular, we examine how the project supports Black and brown communities and ensure that our work firstly does not reinforce racist structures and ideally works to dismantle systemic racism. 

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

It is essential to our work that Maycomb’s Community Outcomes Fund partners with organizations whose leadership and staff reflect the communities that they serve including having people of color in leadership roles, especially Black and brown individuals. We have been successful in finding thoughtful, community-based partners and have a track record of partnering with organizations that have diverse leadership and staff. Importantly, not only are the leadership and staff teams diverse, but the individuals that are clients of the services provided as a result of the Fund’s investments are diverse as well. We have already begun—and will continue—to collect information about the board makeup of our partner organizations, the staff and leadership makeup of our partner organizations, as well as demographic information from the service providers about their program participants.

Impact Tracking and Monitoring

Impact is Tracked:
Yes
Social and/or Environmental Impact is Reported to Investors and Donors:
Yes – to investors and donors
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: Ariella Rotenberg
Mailing Address:

44 Court Street, Suite 309, Brooklyn, NY 11201 USA

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