Rally Total Impact Fund

Spotlight: AiiM Partners Fund

Loren Francis
Hi, my name is Loren Francis and I’m with HighView Financial Group. At HighView we have a keen interest in impact investing. And for complete transparency, we do have an investment in the Rally Total Impact Fund. Today, we’re here to talk about impact and the difference that it can make. And I’m first going to start by asking Marc: Marc, perhaps you could tell us a little bit about the Rally Total Impact Fund.

Marc Foran
Thanks Loren. The Rally Total Impact Fund really exemplifies the word “total” in many ways. It’s total in that the impact we’re looking to generate is to target all the SDGs. And so those are the United Nations’ Sustainable Development Goals. We’re looking to that on a very balanced way. Also, we’re looking to do that across the world, not just within Canada and North America; we’re looking for a truly global approach through global investments. And finally, and interestingly I would add, we’re a fund that takes a multi-asset class approach. And it’s quite different than the balanced approach investors are familiar with where there’s some public equities and some public bonds; we’re actually looking at it much more holistically. We have private investments in the fund as well, that really offer very specialized deep and targeted impact opportunities. And we’re able to provide access to investors to be able to participate in those, in that balanced portfolio content. Now, it’s a “total” impact fund, but it’s also a returns-focused impact fund. So we’re looking to balance, as well, impact and also generate attractive risk-adjusted returns for investors.

Loren Francis
I do know that Rally is very much aligned with the SDGs, the Sustainable Development Goals, and you’ve taken those 17 goals, and you put them into five investment themes. And today, we’re going to talk about a number of those, as we have with us today, Shally Shanker from AiiM Partners, one of the investments in the Rally Total Impact Fund. So perhaps Marc, you could just start with talking about those five investable themes. And then we’ll start digging a little bit more into the AiiM Partners fund.

Marc Foran
The reason why we created five themes around the SDGs is, you know, the SDGs are fantastic at letting us know, here’s what impact is needed. But what they don’t tell you is, Where should you direct your capital in order to affect that impact. And so the themes that we’ve created, and they’re themes that are different than I would say investors, when they think of thematic investing might have come to mind, they’re not sector focused. They’re action oriented focus, there’s an action and an outcome we’re looking to achieve.

• And so our first theme being Basic Needs is really targeting those basic needs that are required for everyone to have a sustainable life. And those that don’t have access is where we’re really looking to focus on providing investments
• Empowering those that have been structurally excluded holds a whole host of social equity issues, be it gender focus, disability focus, age focus, race focus… we’re looking to address those structural inequalities within that part of the theme
• Addressing climate change, of course, a very popular area with investors today is something that we’re looking to do. And we’re looking to do it beyond, call it, the “obvious areas” of just renewables and energy efficiency within buildings; we’re looking for a very holistic approach within that theme.
• Our fourth theme is natural capital. And that’s focused on all the areas of the planet that don’t necessarily directly tie to climate change but are certainly part of the overall ecosystem
• And social infrastructure, our fifth theme, is about making sure that all of society has equal fair and just access to what I would call essential resources.
  And so it’s kind of interesting, because you’re asking me about the SDGs and we have Shally from AiiM here and this is one of those interesting investment opportunities that covers almost all the SDGs and all our themes, particularly on climate change and natural capital, but also on empowerment as well, and bringing all those into one investment mandate and actually showing that there’s quite an interrelation between the SDGs.

Loren Francis
That’s terrific, and I’m excited to learn more about AiiM Partners. So Shally, over to you. Could you give us a little bit of background on AiiM and how AiiM came about and what it is that you focus in on.

Shally Shanker
First, thank you for having me over today. I’m the Founder and Managing Partner of AiiM partners. Our team has been doing climate tech investing for almost a decade, even before it was hip. So we’ve seen the surge of interest in assets and how that can transform a space in sometimes a very, very positive manner. So we as a fund invest in technology companies that are addressing the overlapping issues of climate change and access and equity, we have very measurable and quantifiable goals. We are targeting top-tier performance financial returns for our companies. But in addition to that, we have very strong criteria on how we would measure our outcomes for climate and for access and equity. For example, we hope to offset a gigaton of greenhouse gases through our investments by the time of the end of the fund life. We are at .8 gigatons so we’re very excited about that. That’s how the fund is shaping up. We hope that at least 50% of our portfolio would be invested in companies that have women and people of color in senior leadership. And currently, about 60% of the assets are with companies which do meet that criteria. And we seek to provide capital in “the missing middle”. In the early lifecycle of a company, there’s a lot of capital, philanthropic capital, start-ups, incubators that give them funding. And then as they mature, once they’re profitable, then there’s a lot of really large funds waiting on the sidelines to invest in them. We invest in this missing middle, where we feel that the capital is limited, especially for companies that are solving some complicated climate change ideas, and especially if those companies are led by women or people of color. So that’s been our focus so far.

Loren Francis
Maybe you could tell us a little bit about a couple of the investments that you have made, that would be really neat to hear.

Shally Shanker
Sure. So our focus is to invest in underinvested sectors, and to invest in underinvested talent. So when it comes to sector investing, very much like Marc said, about 60% of the capital has gone in climate change to sectors like transportation, and so many other sectors, so much interest has gone. However 80% of climate change related damage is done by the remaining sectors. So that sector is underinvested. And to give you an example, you know, one of the sectors that we were really interested in evaluating is materials manufacturing. Now this is about a $2 trillion industry. And it accounts for about a fifth of global greenhouse gas emissions. And for the last six years, the sector has received less than 6% of overall climate technology funding. It’s not a very sexy sector. It’s not very exciting. But it’s core to a lot of big problems in climate change. So from a climate change perspective, we were looking for companies that had the potential of low-carbon alternatives. And also packaging is the single largest producer of plastics, which is one of the biggest components of this greenhouse gas area. And those typically end up in our oceans, they end up in our waterways, and in landfills. So from that aspect we invested in a company called Ecologic. They were replacing plastic bottles with bottles that are primarily made out of recycled cardboard and paper. We looked at them for a number of reasons. It was led by a very amazing founder, she had left her career in investment banking to form this company. But one of the reasons we liked the company was they were based in Central Valley, California, which not only had unemployment issues and a whole lot of other issues, but we loved the fact that the company was not only employing people who were previously unemployed but a large percentage of women on the manufacturing floor, even for the night shifts, was women; it was just an interesting anecdote that we heard from them. But anyway, they were very recently acquired by Jabil, which is a publicly traded company. And what we like about that exit is that from impact perspective, they could have raised capital and gone on for another few rounds. But now suddenly, they’ve been acquired by somebody who is got 100 locations, and is growing this product in phenomenal space and also able to add additionality in terms of what the next decade looks for.

Marc Foran
So, Shally, I find it fascinating that a lot of the companies that I look at in your portfolio are just things that, you know, people, as you mentioned, don’t really think about. I mean, the use of mycelium and a fungus for example, as material substitute, you know. The question would be, how do you find these types of opportunities? How do you locate them?

Shally Shanker
The credit goes to my amazing team. And I think our strategy is that once we have identified the sectors, which are the biggest problem creators, then within those sectors, we look for technologies that could potentially solve a big problem. And then even for those companies and for technologies we see, are they at a tipping point? Are they getting to an inflection point where either there is consumer need, willingness to pay, or the incumbents are looking for solutions. So we spend a lot of time to see if the company has actually or a technology has actually entered an inflection point. And that was the reason that we invested in Atlast a few years ago. We felt like there was so much money going into plant-based foods. And an alternative to proteins, traditional animal-based proteins, is one of the priorities for us, given its greenhouse gas impact, as well as something like bacon in the US.. the statistic is that 50% of our rivers are polluted with runoff from hog farms. So bacon is a big problem for the world as well as the US. And this company was coming up with an alternative to bacon, which was fungi based or mycelium based. And one of the reasons we invested in this company was because the number of investments that were going into plant based was nothing compared to what was going into fermentation two years ago. This year, I think investments in fermented or fermentation-related technology companies is going to exceed plant based but two years ago that was not the case. We also liked that the team had a 10-year track record of building products and services and had the know how. And the last aspect we spend a lot of time on is the team. Technologies change, you know, especially in earlier phases, but we spend a lot of time getting to know the team and see, can they actually pivot and do the right thing in terms of scaling up the technology? What are their biases? What are they looking for in outcomes? We found out that from the beginning to the end, product changes, man, there are so many iterations but at the core if the company is aligned, we’ve had a lot of success in those companies. And I think the core of our work is to make sure that our technologies are solving problems for the 99%. So from that perspective, we place a lot of emphasis on the end unit cost of the product, and want to make sure everything we invest in is at cost parity by 2030. Otherwise, we don’t think it’s going to get to the Global South and other countries that we care about.

Loren Francis
I know we need a lot of capital still to come into the sector, particularly impact. But are you seeing the change starting to happen, starting to occur, where there’s more interest and more capital becoming available? Are we going to be able to make a difference in terms of impact going forward?

Shally Shanker
We have currently three companies in our portfolio, they’re raising between $100 to 250 million, they are on path to solving a big problem, they could not have dreamt of going to market this quickly. But there is actually interested capital, aligned capital. So we love the amount of capital that’s come into the space, because it’s letting these companies actually be able to hire faster, grow faster. And suddenly there is realization that climate change is not a software play. So I think from that perspective, people are getting a lot more comfortable writing cheques into companies that will use it for “the C word”, capex, you know, and we see a lot more people getting comfortable with that. And I think that’s going to be the tipping point. And I think that’s why it’s been good to have the really large investors come in, because a lot of them coming from private equity do understand that this space does need capex as well as a lot of physical and people assets to grow.

Loren Francis
Can you talk to us a little bit about how you actually measure the impact of your investments.

Shally Shanker
We measure it on three levels. One is climate change. So every company we invest in, we do our independent analysis of the impact it will have on greenhouse gases and biodiversity. We have researchers, scientists and data scientists that we work with whose role is to help us make sure that before we make an investment we are not going to make any unintended negative consequences on the environment. So from that perspective, we have a point of view internally before going to invest in a company. After we invest in companies, we work very closely with them to make sure we understand their growth trajectory, where they’re going. And we’re finding out a lot of companies are too busy, or they’re not at a point they’ve had a chance to sit down and calculate their own greenhouse gases sometimes. So that’s a role we play with all our companies very proactively. And it’s symbiotic because we get to learn so much about their business aspirations and the growth and the scalability. And on the other hand, we have the in-house expertise that they’re able to share with them and partner with them. So climate change is one. Biodiversity is the other factor that we spent a lot of time measuring. That’s so for climate change, measures like greenhouse gases are tangible, measurable, even though we have to do it company by company we can do it. But biodiversity is a challenging one. And this coming year, our priority is to come up with metrics around biodiversity that we can disseminate and share with our colleagues in the industry. And the third area that we spend a lot of time thinking about is inclusion. And from the day a company comes into our pipeline, we spend a lot of time making sure that no company is very unintentionally screened out for a standard criteria it may not meet. So every company’s looked individually and we’re making sure very proactively we’re not screening out deserving candidates, irrespective of the background, irrespective of the composition of the team.

Loren Francis
When you look at the investments that you hold in the Rally Total Impact Fund, how do you look at measuring the impact of each of your investments?

Marc Foran
You really have to use a combination of data, so quantitative information and targets, but you can’t be exclusively data focused to think, Well that is going to lead me to what’s going to be impact. There are intangibles, there are fundamentals, there are the people that are involved. And so taking a quantamental approach, in terms of ascertaining that impact is quite important, and we’re seeing this, and it has been actually a learning for Rally as we’ve gone through the years, is that the intersectionality of impact is quite strong, right, like good companies do good things across all the things. And you know when we look at more traditional funds, they’re very narrow focused: let’s focus on just climate change, let’s focus just on racial or gender issues. And we’re seeing that instead coalesce and those businesses, frankly, that have multi-dimensions of impact rather than just a narrow focus also tend to be our best performers as well from a financial standpoint and from a risk standpoint – they tend to be more rigorous, more dynamic and more successful.

Loren Francis
Well, it’s been wonderful speaking with both of you today. Thank you.

Loren Francis
Hello, my name is Loren Francis and I’m from HighView Financial Group. At Highview, we have a keen interest in impact investing. And we’re here today to talk about the Rally Total Impact Fund with Marc Foran, and also one of the investments in the fund, Area One, and that is with Joelle Faulkner. So I’m going to start by turning it over to Marc and ask Marc, if you could define for us what impact investing actually means.

Marc Foran
Impact Investing is a form of investing where one is looking to generate a positive social or environmental outcome alongside generating an investment return – and that would be a market rate or better return,

Loren Francis
Maybe you can talk to us a little bit about the Rally Total Impact Fund, which in complete transparency, HighView Financial is an investor in, but just tell us a little bit about the makeup of the fund and what makes it different from, you know, investing just in an ESG type of fund,

Marc Foran
You know, ESG, is certainly a very popular form of investing. But it really invests in looking at ESG factors as a form of risk. And so that risk then is to the shareholders. So essentially looking at, How do the events of environment, social and governance from the world affect investment returns. The difference there is, it’s not necessarily looking at the outcomes or the positive impacts the other way around: of the investment on the world. It’s looking at it from a shareholder-centric standpoint, and impact is incorporating that but then going beyond as mentioned before, also considering what is that investment doing to improve the environment or the social equity within the world.

And so within the Total Impact Fund at Rally, and we use the word total quite intentionally, we’re looking to generate very holistic impact alongside an investment return. And so what do I mean by impact? Our framework for that really is the United Nations’ Sustainable Development Goals or SDGs. They’ve really become the language of impact investing, and all 17 of them and the 160 Plus areas underneath that many people aren’t aware of, really do a great job of outlining the very necessary impact that needs to be generated in the world. And so we are looking to in our fund provide impact that covers all the SDGs, so the totality of the SDGs. We’re doing that also on a global basis, because frankly, the problems that we have in the world are global indeed and so we’re looking at all regions. And the final aspect of total for us in the fund is we’re doing so across all asset classes. And I think investors might find it interesting to note that when we say all asset classes, we don’t just mean public equities and bonds like a traditional balance fund, we have 30, 35% of the holdings in private investments, which are very deep and very intentional within their impact.

Loren Francis
Maybe Joelle, you could give us a couple, you know, comments on how you feel impact resonates and what impact means to you.

Joelle Faulkner
Area One Farms invests in Canadian farmland in partnership with Canadian farmers and operates those farms. And we’re really focused on the environmental outcomes associated with farming, and in particular, how we can migrate in an at-scale system through to regenerative production, which is the idea of capturing more carbon. And then also how we’re affecting the local communities – so the social aspect of being able to ensure continued intergenerational success of Canadian farmers. And then Canada exports most of its food so when you think about what we’re doing and what we’re growing, it’s really trying to impact from an SDG perspective – the no poverty, no hunger – globally.

Loren Francis
Very interesting. And can you tell us a little bit about how you work with Canadian farmers and how they might find you as well.

Joelle Faulkner
Most of our farmers find us through either referral or Internet search, but they generally find us because most people who invest in farmland actually buy land and rent it to a farmer. So they’re a competitive buyer, but we don’t. We look for farmers who are wanting to expand rather than those who are wanting to grow or sorry to sell, and we buy in partnership with those expanding farmers. So they put in money, we put in money, we buy together, and then we operate together and we work right now between Ontario and Alberta.

Loren Francis
What are some of the challenges that our Canadian farmers are facing in particular, one, yes, to capital but, two, also in terms of climate change effects that are happening.

Joelle Faulkner
Climate change, we always talk about in Canada, we’re probably, compared to other growing geographies, net beneficiaries. Probably over time, we’ll become a little more hospitable to plant growth with climate change. The downside for us, the same as everyone, and you’ll be noticing this too across other kind of investments in your life, is the increased volatility is really bad for everyone. It is bad for Canadian farmers, it is bad across global producers, it’s really hard to manage. And those things are getting, it seems like, more common and worse. And so our farmers struggle with and try to manage that risk.

From a perspective of what they look to us for: originally, it was just capital. We’ve actually gotten, have now enough farmers and have gotten good enough at understanding the different operations to start spreading best practices between them. And I think that’ll grow over time. And I think, especially as the world looks to agriculture to be a place that kind of curbs climate change through sequestration of carbon in soil, the practices are going to change a lot. And we look forward to being able to help our farmers adapt to those kinds of changing needs.

Marc Foran
You know, in terms of thinking about where does Canadian farmland sort of fit in the global picture, if you were to sort of say, you know, the practices that we’re putting in place today and, you know, what role is it going to play in feeding the world? Is it something that’s going to stay static? Or do you think it’s something that’s going to be even more important down the road?

Joelle Faulkner
I think Canada is increasingly important. I think as we think about climate change, and what that means for the globe, crop production is harder. We’re moving into unchartered times and differences that we haven’t exactly designed for. So we’re not really good at designing for drought resistancy, for example. Canada has a lot of land mass, and it doesn’t have a lot of people, and it has a fair bit of efficiency within the system. And so the idea that Canadians can continue to produce a lot of the global food supply, I think is a really important part of our place in the world, and is a thing that we are very much interested in helping achieve.

Loren Francis
I have another question for Joelle in terms of where we’re going moving forward with agriculture, with respect to, one, carbon emissions and, two, water pollution, because those have been two aspects that a lot of people talk about when it comes to agriculture. I would love to hear your thoughts on those two things.

Joelle Faulkner
I have a slightly unconventional view, both as it relates to, if you think of where investors might be in terms of expectations or the general public, and if you think of where farmers might be, I am probably somewhere between the two, which means not a totally shared view at the moment with either. So I’ll just explain kind of why and what we think. Farming, because of the food aspect and because I take the view that we actually need to feed the world is probably going to adapt a little more slowly than we would want it to. Right. So on an investor standpoint, or public standpoint, we want to cut emissions to zero immediately. And we would want to be able to sequester carbon in the soil immediately. And the struggle there is, those two things, emitting carbon is a current part of how you farm. So tractors and combines take fuel. And even if you could switch that all to battery, you still have to transport the grain and it still has to get to somebody and you still need fertilizer products that are often hydrocarbon based. So I think to think that we could immediately switch it is probably out of realm. That said, from an agricultural standpoint to essentially say like, Hey, don’t put pressure on us, I think that’s probably also already outdated, in that the practices that we have developed to date around agriculture, which include kind of a big reliance on synthetic fertilizers, are probably somewhat outdated. Meaning, if you can achieve the same thing with less fertilizer, which is a big hydrocarbon use, specifically nitrogen, every farmer would want to do it, because it would bring their costs down. And it would potentially increase productivity, and both those things are exactly in the farmers’ interest. But the practices are not yet well developed. And what we often don’t think about is the systems that kind of support agriculture and current practices also need to migrate in order for new approaches to work. So specifically, I think that movement of people to see good as not organic anymore but regenerative is a really good first step, because organic requires a lot of tillage for weed control, which actually emits carbon into the atmosphere, and has soil erosion problems and a bunch of problems that the farmers never wanted to do but kind of the general public saw that is this primary good. The shift of that to regenerative is super positive because regenerative is the idea of not just focusing on soil chemistry but also on biology. And what we all know, and the data super strongly supports is, the higher your carbon levels in the soil, the more efficient and resilient that soil can be. Because it supports a bunch of biology and it makes it more regenerative, which, which you can just tag to more resilient. It holds more water, it holds more nutrients, it has all kinds of great aspects. So my view is within the next 10 years, we will transform from being primarily a synthetic-based production system to largely a regenerative kind of system.

And the thing that’s unknown is where on the scale is that. On one hand, you could use zero synthetics, and you could use zero kind of additives. And that would be really good. But we probably couldn’t keep up the yields that we require to feed the world. On the other side, you could use everything we’re using and not change practices at all. And that is both problematic from a climate perspective, and really expensive from farmer perspective. So my view and kind of the approach we’re taking and trying to support is how do we find the practices that we can actually scale that both increase productivity and decrease costs, making them economically desirable to farmers, at the same time are decreasing our carbon output. So I think that’s the big revolution coming. And I think Canada is actually in a really good place to be a leader in that.

Marc Foran
I think one of the interesting things about your journey, and the fund that we’ve invested in with you, Fund IV with Area One, has been the evolution of impact from when you initially started Fund I, and started putting in really good and proper practices for farmers. And again, using that partnership model. And actually seeing that impact and returns could be blended and then putting that with more intentionality as each successive fund came. So wondered if you could just talk about the impact journey as it pertains to the asset class, your approach to it, and maybe some other impact areas that go beyond the climate change and natural capital perspective,

Joelle Faulkner
The impact journey for us, so our starting point, was that investors will actually do better by working directly with farmers and by giving more back to those farmers than any other model contemplated. So our starting point was one where we actually share appreciation with the farm partner, above and beyond their equity interest. So they co-own with us, they get all the income and appreciation on the part they own, just like any other partner would. And then in addition they’re in part of the income and appreciation on all the assets that we actually paid to buy, so on our investment. What that means is they have more income and more of the appreciation in the asset itself, which means more of the wealth stays local. The other big positive outcome that we realized, but I don’t think I appreciated quite how big it was, is when you think of ESG, that governance piece is really important. So who is making decisions and how are those being made in ways that support good environmental and good social outcomes? And because of our model, the farm partner makes most of the decisions. As it happens, local decisions are better decisions across both environmental and social measures. So if you think back to kind of where we saw really good social outcomes get made, it was in Ford and Hershey, and it was in these company towns where the owners lived alongside their employees. And for farms, that is the case. So while we are trying to capitalize farmers for growth, we actually want the decisions to stay really local. Because in our journey we have realized that’s actually a really good way of making sure you get good best practice outcomes on the other aspects.

Loren Francis
Well, it’s been wonderful speaking with both of you today. Thank you.

Loren Francis
Hi, my name is Loren Francis and I’m with HighView Financial Group. At HighView we have a very keen interest in impact investing, and to be transparent, we do have an investment in the Rally Total Impact Fund. Today, we are here with Marc Foran from the Rally Total Impact Fund. And also we’re here with Jeff Cyr, managing partner from the Raven Indigenous Capital Partners Fund. I’m going to just start by asking Marc to just explain a little bit about what impact investing means, and how it’s different from, let’s say, investing for ESG purposes.

Marc Foran
ESG is very much a focus of looking at environmental, social and governance factors from a risk perspective. And that risk perspective is really to shareholders. So, how does the world of changes in environment and social elements impact shareholders? Now that’s quite different than impact because impact is investing with intentionality to make a positive contribution to the world, either to the climate of the world, or to the social aspect. And so that is the core difference. So yes, you’re looking at the impact the world on shareholders, but you’re principally also focused on, What is my investment doing in terms of contribution to that world? And it is with great intentionality an impact investor would go out and seek investments that create that positive change. And of course, that would be alongside an investment return as well. We invest for impact along the UN SDGs. And we look to invest across all the SDGs rather than a specific area. So the totality of the SDGs.

Loren Francis
Perhaps you could tell us a little bit about the Raven Indigenous Fund and how it started and why it exists. And then we can get into some more questions on it.

Jeff Cyr
Sure, absolutely. Yeah, thanks for having me on here… The Raven Indigenous Impact Fund, you know, very much follows on what Marc says it, it’s an impact-first fund and its intentionality is baked into everything we do both as a fund manager and in the fund itself. Started really around 2018 and the co-founders and I, you know, really noticed a gap in capital for Indigenous enterprises in the ecosystem. And that’s really social enterprises that are high impact, really lifting up their community alongside their business and their business growth. And it’s been a pretty exciting, pretty exciting space. We originally set out to raise $5 million, just to prove that an Indigenous capital provider could do the work and execute on the strategy, and ended up at a $25 million fund. What we have unearthed, I suppose, is a pretty robust innovation ecosystem in the Indigenous enterprise space, where, for example, now we have more deal flow than we do capital. Which is a great problem to have. And it’s a good sign of where the Indigenous economy is at. And lastly, you know, around income impact. I mean, we say at Raven, we need to see a direct line of sight between every dollar we place, every piece of capital that we place, in an enterprise and the upliftment of the community and we really work hard to track that impact throughout everything we do. We were sector agnostic when we started the fund; we wanted to see really, Where where’s the energy in the ecosystem? But there’s been clusters, natural clusters, around technology, e-commerce, tech-enabled businesses, around natural source products from the land and the sea, really in that innovation space.

And as an example, I’ll give you two, actually name them. Virtual gurus out of Calgary, which is actually a digital two-sided marketplace, which connects folks with skills and businesses looking, you know, to buy blocks of time of skill. People tend to think of this as executive assistants, but it goes way beyond that where you can get project managers and you know, you can get creative people, whatever you need. And then reaching deep into both Indigenous and underserved communities to bring those people with skills forward and then to continue to upskill through their own virtual academy, and they’re doing exceptionally well now. The second you know, obvious one, that has a lot of profile these days is Cheekbone Beauty, which is an Indigenous entrepreneur, out of St. Catharines, Jen Harper created an innovative, completely clean Indigenous beauty line where Indigenous folks and people of colour can see themselves in the product line. But also, which is an extraordinarily clean product line, from packaging to every part of the element inside the cosmetics and a continual sort of pace of innovation at that company.

Marc Foran
I’m wondering if you could just talk a little bit about, you know, some of the transformation that you’ve seen since you started and arrived at this point,

Jeff Cyr
What seems to have occurred is that when Indigenous entrepreneurs or founders find out that there’s an Indigenous capital provider on the equity side, on the venture capital side, they basically kind of emerge, you know, heads above the water, like, Oh, there’s another way to get capital besides, you know, collateralized debt. And the mainstream financial system hasn’t been spectacular at servicing these folks in the past, so there’s this energy that has kind of percolated and come up. And for a lot of indigenous entrepreneurs, venture capital, really was like, you know, unicorns and dragons: you think they might exist, but you’ve never seen it, you know, in your space. So there’s that.

The second part, I think, at an ecosystem level, there is this broad acknowledgement that there’s a bit of an untapped marketplace here and that we may need to provide different capacity tools to go alongside that, especially financial awareness and how investment can play inside a business. On the investor side of the house, there’s been way more interest that’s been sparked by this and the interest is not just coming from what I would consider mid-level investors, you know, who invest $500,000 or a $1 million, but into larger institutionals now realizing that there is a vehicle or t potentially vehicles where they can place capital and really have an outsized impact on the planet on their countries where they live in and on people’s daily lives. Lastly, and I know this is a bit of an odd one for folks is, what I’ve discovered is that, at least in my analysis, when Indigenous people control the capital and how it’s placed as an intermediary in the space, it allows for a lot of innovation to occur from a financial level, where we can really decolonize the investment process. It’s been really interesting to watch investors come along with us, and really be super open minded, including where we develop our own Indigenous impact metrics framework, you know, working on different types of deal structures that really work for Indigenous founders where they are at.

What we’re doing is looking at how to use traditional epistemology, Indigenous ways of knowing and being, including storytelling, working right with entrepreneurs inside their company, as we invest in them to build out; this is how we want to measure impact. And we don’t want to just count heads, we want to know how lives are getting changed bit by bit. We have a bunch of partners who we’re working with, we’ve been spending a year-and-a-half birthing our impact framework and maturing it in the space. One of the big efforts that I think is going to pay off a lot is, we’re actually tracking it to the UN Declaration on the Rights of Indigenous Peoples, we feel that that’s a little bit more appropriate for us and our impact measure. So we can see this direct line of sight between, you know, for example, self-determination that you see in the UNDRIP. So in that space, where we’re doing much more connective work, building individual corporate placemats, building capacity with inside these new companies, largely new companies, to understand and help them understand their own impact as we go.

Marc Foran
I think it’s really important to magnify that an investment such as Raven is really about systems change. And you know, it really brings forward how we see and certainly Raven sees the world as when you create that systems change it’s truly a win-win. It becomes self-reinforcing; you open eyes, you open eyes that financial inclusion in the Indigenous community is a major issue. And you can see now that, with those eyes open, you’re starting to see the ripple effects.

Jeff Cyr
We’ve had a lot of reach-outs from our brothers and sisters, you know, south of the medicine line. So in the United States, in Amazonia and in Pacifica, in particular Australia and New Zealand with Maori led and, and other indigenous led folks looking to do the same thing, looking to have Raven come in and do the same thing. And I just returned from a large sort of business development trip in Hawaii where Indigenous native Hawaiians are looking at scaling what they do and guess what, there’s no Indigenous venture capital in Hawaii. So you know, It’s just a global phenomenon, I think we’d like to, you know, within the next sort of seven or eight years have placed, you know, a quarter billion of capital, so $250 million of capital between the three funds placed, and growing, and building Indigenous wealth in Indigenous hands and kind of letting that have its own secondary and tertiary impacts.

I’m also leading some work within the Raven group on, If impact funds are operating at an enterprise level, there’s another set of issues that need to be dealt with and that’s community-level issues that are much more complex to resolve. But we think outcomes financing, so one of the social finance tools, building things, as you mentioned Marc, like government-commissioned outcomes contracts, social impact bonds, those sorts of work. We have two in play now and we’re looking at scaling that because we believe the impact is huge, both in terms of cost-savings for the ecosystem, but a way to onboard private capital into working in a different way with Indigenous communities. I mean, look, you know, to be honest, governments have been trying to solve problems in the Indigenous space for 200 years and done a really bad job of it largely. And so we think there are innovative and different ways to do that. And we think investment capital can play a strong role, private capital can play a really strong role in shaping that.

Loren Francis
Marc, maybe you can talk a little bit about, in terms of Jeff’s comment on needing private capital to affect change, maybe you can talk about, you know, the private-public structure of the fund itself and why the importance of these types of private investments and aligning and bringing in private capital, to meet largely a lot of the SDG goals, but also, particularly in our Indigenous communities.

Marc Foran
You know, it really is with intention beyond just the financial risk metrics of the different asset classes, the impact that’s generated from, let’s say, public equities, or public bond investing is quite different than what we would see on the private side. The public side is really about investing in large organization that are making change. And that change can be significant given their scale, but it does sometimes take a big ship a long time to turn. On the private side, what we really get, I think, Jeff is really explaining this quite well, very deep systems change opportunities that are intentional, targeted, focused, and, very importantly, can scale over time, and, really create that systems change that will be bigger in the future. Jeff being very modest said that their first fund was only $25 million, their second fund, it looks to be about three times that! Wow, like already, you’re starting to see that change start, so those seeds can have very deep impact and ripple effects. And, you know, it’s interesting that when we look at the publics, we see the commentary that those are the type of investments that they’re kind of looking to make over time, too. So we’re at the incubation stage with the private side and very targeted and seeing those businesses become successful that will then be able to scale either in partnership or alongside some public organizations that are looking to change. So it’s quite an important piece of what we’re looking to do with the fund on the private side: get those very deep, intentional impacts.

At Rally, you know, and many of the investment companies that we used to be at, we understand the capacity of private capital, and that, again, you’re creating that win-win situation. And it’s really important to keep in mind that, you know, when you’re doing that ecosystem change, and if you look at the SDGs, and some of the estimates more broadly speaking, it’s $12 trillion, $12 trillion of new global opportunities that are being created and double that in terms of changing existing systems. So the investment opportunities from an investor standpoint are huge. So you really can generate very attractive returns and at the same time invest alongside your values to affect that systems change.

Jeff Cyr
You know, I don’t think that I would be alone in saying that the real key to getting to net zero, you know, from a climate perspective, the real key to, you know, dealing with financial exclusion and social exclusion in societies — two of the really big problems that we’re facing that are, you know, one of the what they what they call big, hairy problems that really require you know, creative solutions. I think actually impact investing is probably the key, one of the key ways of dealing with this and I mean, really, what are we doing with capital, you know, And we should be putting it towards the future. And we need to think in my world, we need to think three or four generations ahead while we look at three or four generations back. This is what I would call seven generation thinking from an Indigenous context, and what’s the impact of our capital in four generations? So we need to be making different economic choices now and, you know, there are different choices to be made. It’s not that there’s an absence of vehicles and tools to do this. You know, I believe that economies are human constructions. And if things are going sideways, like they are with the planet and freshwater and species and all these issues around climate change, in particular, than we have the opportunity to remake it, and impact investing allows you to remake it very purposely. That’s my admonition to the financial sector and to big asset holders, you know, be a little bit more like Rally, like, be focused on what you actually want to achieve in your world and that world for your children and your grandchildren. Because hoarding profits, hoarding money, you know, in our communities used to be considered a mental illness. Your money is designed to be given over to the benefit of community, really, right, you’re to uplift everybody. So it’s a bit of more radical approach that you’re used to on an investing conversation but this is why we do the work we do, right? It’s for people, it’s for the planet.

Loren Francis
That was a very informative session. Thank you both very much.