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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

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
Microfinance, low-income financial services & micro-insurance
Global Health

Firm Overview

Category: Private Debt - Microfinance

WaterEquity is the first asset manager exclusively focused on solving the most urgent issue of our time - the global water and sanitation crisis. Founded by award-winning entrepreneur Gary White and Matt Damon of Water.org, the success of WaterEquity is built on decades of experience investing in water and sanitation in emerging markets. WaterEquity’s funds invest in a portfolio of high-performing financial institutions and enterprises in emerging markets to deliver access to water supply and sanitation to low-income families. To date, these funds have reached 1.6 million people with access to safe water or sanitation, of which 93% are women.

Firm Headquarters: US & Canada
Years of Operation: 3 – 4 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 affordable financing is the biggest barrier to ending the global water and sanitation 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:

Economists estimate the market opportunity to provide water and sanitation services to all by 2030 at $1 trillion. Individuals: At least 600 million people without access to safe water and sanitation could be reached with improved water and sanitation services if microloans were made available to their families. That’s an $18 billion market demand from emerging consumers WaterEquity is responding to. Enterprises: Up to 68% of small and medium-sized enterprises in emerging markets are either unserved or underserved by financial institutions. WaterEquity believes 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:

Our team emerged out of Water.org, the most well-known water non-profit in the world that built the case for microfinance for water and sanitation. This established us as the proven experts in mobilizing capital for financial institutions and enterprises that serve the water and sanitation needs of low-income consumers. We stand apart from other impact investment managers due to our deep knowledge and decades of experience investing in emerging markets and water and sanitation, delivering proven social and financial returns. In addition, Water.org has partnered with more than 150 financial institutions across 13 countries, providing those institutions with philanthropic capital to cover the start-up costs of launching a water and sanitation microloan portfolio. WaterEquity leverages Water.org’s track record by investing in these institutions.

Investment Example

Annapura is a microfinance institution that provides microloans focused on improving the health and economic empowerment of women and their families living in poverty in rural communities in India. In 2013, Annapurna established microloan products for water and sanitation helping clients secure financing for household toilets, piped water connections, and water filters. Between 2016 and 2019, after investments from WaterEquity, Annapurna quadrupled the number of its water and sanitation microloans, disbursing nearly $10 million in microloans and reaching 189,000 people with safer water and sanitation. As a Fund III candidate, Annapurna is poised to further expand its water and sanitation microloan portfolio to $30 million with a targeted reach of 670,000 people. In working with global partners like Annapurna, WaterEquity’s funds ensure families living in poverty have the critical financial support to secure household access to safe water or sanitation to build healthier, brighter futures for generations ahead.

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 identify as women:
25% to less than 50%
Percentage of Investment Professionals who identify as a person of color:*
50% or more
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:
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
Addressing Gender Inequality
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’s investment process incorporates impact at each stage, ensuring alignment with our impact goal to accelerate universal access to safe water and sanitation. During the screening stage, WaterEquity evaluates the potential borrower as a fit for the fund’s impact profile and develops initial impact projections. During due diligence, WaterEquity evaluates each potential deal across multiple dimensions of impact to assess its fit with the fund’s impact objective, determine final impact projections, and produce an overall impact score. Potential investments that don’t meet impact criteria would not move forward.

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

WaterEquity undertakes ESG analysis of every potential investment. This analysis identifies key risk areas across the environment, employees, and clients. Through this process, WaterEquity may set ESG-related improvement requirements for potential borrowers either as milestones during the investment, or as conditions precedent to the investment. 

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: Elan Emanuel
Phone: 415-847-7916
Mailing Address:

1828 Walnut Street, Fl 3, Kansas City, MO 64108 USA

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