Total Assets Under Management: $100 – 249MM
Asset Class: Private Debt - Absolute Return / Notes
Impact Investment Focus:
Small and Medium Business Development
Root Capital is a nonprofit with a mission to grow rural prosperity in poor, environmentally vulnerable places in Africa, Latin America and Southeast Asia. Since launching in 1999, we have grown into a leading impact-first lender and accelerator of small and growing agricultural enterprises that are trapped in the missing middle - too small, remote and risk for local commercial bank financing but too big for microfinance institutions to serve. Our approach includes lending capital, delivering financial training, and strengthening market connections for small and growing agricultural businesses. Over the past 17 years, Root Capital has cumulatively loaned more than $1 billion, supporting more than 625 grassroots businesses and reaching more than 1 million farm families. As a result, Root Capital has contributed to 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: More than 10 years
Total Assets Under Management:
$100 – 249MM
Total Number of Investors: More than 25
% of Capital from Top 3 Investors: 25 – 50%
Root Capital supports agricultural businesses with credit, capacity building, and connections to sustainable supply chains. These businesses are farmer associations and private businesses that help build sustainable livelihoods by aggregating hundreds to thousands of rural producers in Africa, Latin America and Indonesia. When these businesses have a chance to succeed, they become engines of impact, creating opportunity where it is scarce and benefits that ripple upward for entire communities and local economies â€“ improving incomes for farm families, helping to feed the planet, protecting vulnerable land, improving opportunities for women and sustaining peace. Our work is funded through philanthropic contributions from donors and debt from investors. Through our loan fund, 100% percent of low-interest loans we accept are placed directly with businesses. Philanthropic contributions serve to strengthen our balance sheet and underwrite the operating costs associated with Root's activities â€“ providing capital, delivering training, and catalyzing the field of agricultural finance worldwide.
Ankole Coffee Producers Cooperative Union (ACPCU), a Ugandan Fair Trade and organic-certified coffee cooperative, was established in 2006. In 2008, the cooperative had a three-person staff, an entirely paper-based accounting system and no access to credit. Concerned about ACPCU's unpredictable cash flow and financial systems, Root spent five days on-site, training the staff to reconcile accounts, value and manage inventory, and create reliable financial statements. Root approved a $113,000 loan, which financed ACPCU's first direct exports. A year later, ACPCU had repaid the loan, hired a qualified financial accountant, purchased computers and taken a new loan. Over a few years, ACPCU was able to access credit from additional lenders, expanding its operations, constructing a new office and processing plant. Over the past eight years, the cooperative has grown from 3,800 to 9,000 producers, exporting one container to over 100 containers of coffee annually, and sales have grown more than forty-fold.
Leadership and Team
Cumulative Leadership Experience in Investing:
More than 30 years
Cumulative Impact Experience of Top Three Firm Leaders:
More than 30 years
Willy began his career on Wall Street as a financial analyst in Latin American corporate finance. Later, he worked as a business journalist in Mexico, where he discovered the challenges faced by cooperatives and small producers who lacked access to credit and markets. He founded Root Capital in 1999 to build a different kind of deeply mission-driven financial institution -- one focused squarely on growing rural prosperity in some of the poorest and most environmentally fragile places on the planet. Since then, Root Capital has grown to over 125 employees, with clients across Latin America and Africa, and $100 million in assets. Willy received the Skoll Award for Social Entrepreneurship in 2005, was named an Ashoka Fellow in 2007 and a Young Global Leader by the World Economic Forum in 2008, became a member of the Young Presidents’ Organization (YPO) in 2009, was listed as one of Forbes’ “Impact 30” in 2012, and was a Henry Crown Fellow (Class of 2012).
|Peter Bernard – Chief Operating Officer More Info
Peter retired from his post as a managing director and the chief risk officer of D.E. Shaw & Company at the end of 2013. Previously, he was president, chief operating officer, and chief financial officer at AlphaSimplex Group, a Cambridge-based investment management firm. From 2000 to 2004, he was the chief financial officer at Risk Metrics Group, a New York-based company which specializes in risk management software and data. In 1994, he co-founded New Bond Trading, Inc., an investment management firm specializing in fixed-income arbitrage, and was president of the company until 2000. Prior to that, Peter held various positions at J.P. Morgan & Co., where he worked for fifteen years. In 1987 and 1988, he advised the Presidential Task Force on Market Mechanisms (the “Brady Commission”) which investigated the causes of the October 1987 stock market crash. He received a B.A. in economics from Bowdoin College.
|Jared Chase – Chief Financial Officer More Info
As the Chief Financial Office and Treasurer, Jared is responsible for overseeing Root Capital's accounting, reporting, budgeting, financial planning and analysis, treasury, governance, information technology, enterprise risk and compliance activities. Prior to joining Root Capital, Jared held multiple senior management roles at State Street Corporation, including Chairman of State Street Global Alliance, Head of Global Treasury, Liability Management, Money Markets & Derivatives, and Managing Director of Fiduciary Services at State Street Global Advisors. Additionally, Jared has been a board member of the Massachusetts Audubon Society since 1998, serving as Chair since 2012. He also serves on the board of two other environmentally focused organizations, the New England Aquarium and the York Maine Land Trust. Jared holds a BS in Finance from Babson College.
|Catherine Gill – Executive Vice President of Investor Relations & Communications More Info
Catherine manages investor relations, communications and marketing at Root Capital. Previously, she served as director for the Capital Partners division of the Nonprofit Finance Fund (NFF) and as site director for the agency’s New England region. She has also served as an adjunct professor at Boston University’s School of Management. Catherine holds an M.B.A from the Instituto de Estudios Superiores de la Empresa (IESE) in Barcelona and a B.A. in ancient Greek from Wellesley College.
|Brian Milder – Executive Vice President of Strategy, Advisory & Innovation More Info
Brian leads Root Capital’s Financial Advisory Services team as well as the Strategy, Knowledge & Innovation team, which includes research & development on new products and services, impact assessment, and field building. Prior to joining Root Capital, he worked as Boston site director for Health Leads (formerly Project HEALTH). He was also an entrepreneur-in-residence for the Nonprofit Enterprise and Self-sustainability Team (NESsT), which operates venture funds to incubate sustainable social enterprises in Latin America and Central Europe. Brian holds an M.B.A. from Harvard Business School and a B.A. in social studies from Harvard College.
Percentage of Investment Professionals who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
25% – 50%
Percentage of Board Members who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
25% – 50%
Target Financial Returns Relative to Benchmark:
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
Percentage of Total Assets Under
Management that are Impact Investments:
Primary Impact Outcomes:
Addressing climate change and environmental issues
Conserving land, ecosystems and natural resources
Increasing access to financial services
Value-added Services Offered:
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:
Prospective clients and loans are assessed on their financial viability as well as social impact. Our clients generally operate in areas in which individuals live below $2.50 or even $1.25 a day (in Africa) and below $4 or $2.50 per day (in Latin America). We seek out businesses that will improve livelihoods of individuals in one or more of 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. We use Social and Environmental Scorecards to evaluate prospective clients' impact through numerous indicators across three dimensions: scale (number of smallholder farmers reached), type (incomes, treatment of workers, community and environment) and depth (strength of clients' practices). Root Capital loan officers must affirmatively identify how the prospective client's business will create a positive impact.
Investments systematically include social and environmental sustainability practices in the due diligence process:
As part of the credit evaluation process for each client, Root Capital's loan officers use our Social and Environmental Due Diligence Scorecards to evaluate the client's social and environmental practices. These tools include metrics developed by the Impact Reporting and Investment Standards (IRIS) that we report in our Quarterly Performance Reports and Performance Dashboard, but go substantially further in profiling clients' practices. Root Capital uses social and environmental metrics and deep-dive impact assessment studies to inform our portfolio strategy and credit evaluation criteria, in order to maximize our impact. We seek to invest in small and growing agricultural businesses that value environmental stewardship and build sustainable livelihoods in local communities. We target early-stage businesses who often are unable to secure financing from other commercial sources due to their small size, lack of collateral, limited managerial experience and perceived risk and whose growth we can accompany over time.
Impact Tracking and Monitoring
Social and/or Environmental Impact is Reported to Investors and Donors:
Yes - on regular basis (annual or quarterly)
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