1. Bay Area Impact Investing Initiative 5 year Summary: 2013-2017
Lauryn Agnew
January 2017

2. Bay Area Impact Investing Initiative
Investing for sustainable economic prosperity and community resilience in the San Francisco Bay Area
The Bay Area is a special place: the highest GDP per capita in the US, we are innovative, we are risk takers, and we have stunning vistas and a diverse population. We also need to continue to invest in our own backyard to keep it special and prosperous. This center of innovation, academia, finance and technology needs investments in sustainable long term economic development to retain its strength and leadership.

3. Impact Investing Impact Investing
Financial First
Impact First
Fiduciary standards of expected risk and returns
Rigorous due diligence processes
Seeking to optimize community impact
Many different measurements for impact
Impact Investing
Investments that have strong financial returns and a positive impact on the mission

4. Aligning Investments with Mission
UWBA Mission:
To cut poverty in the Bay Area by ½ by 2020
Themes: Good Employment and Affordable Housing
BAIII Mission:
To create a blueprint to increase the quantity and effectiveness of impact investing in the Bay Area
To promote sustainable economic prosperity and resilient communities in the Bay Area

5. Impact Investing Continuum
All financial structures have impact

6. Impact Investing Themes

7. Each asset class has a unique combination of risk, return and impact
Intentional Impacts
Each asset class has a unique combination of risk, return and impact

8. BAIII Custom ESG Factors
Positive Scoring: based on objective data
Job Creation (High): defined by Universe of Bay Area employers
Criteria
Data Elements
Importance
Weighting
% of Total
Labor Relations
Evaluation of relationships with organized labor
High 4
22%
Recognition
Workplace and Diversity
Diversity
Total Workforce and Management
Medium 2
11%
Sexual Orientation
Non-discrimination Statement Same Sex Benefits
Environmental
Toxic Release Information and Spills
Human Rights
Global Sullivan and Global Compact
Corporate Governance
Governance Metrics Grades.

9. Modeling the Equity Portfolios
Custom ESG Scores, Tracking Error, Geographic Focus
Model UWBA
Custom
ESG Score
Tracking Error vs. Russell 3000

10. Investment Policies & Impact Goals
BAIII Custom Equity model portfolio:
Investment Policy:
Expect market-like risk and return- Benchmark R3000
75% Bay Area headquartered companies vs. 19%
ESG criteria scores improve 30%: > 60
Good employers, good jobs, good environmental stewards
Diversity policies, management and boards
Impact: Influence and change corporate behavior
Support employment, regional economic prosperity

11. UWBA Model Equity Portfolio
7 years: January 1, – December 31, 2017
annualized cumulative
Bay Area/UWBA Equity Model % %
Russell % %
BBACAX (+div reinvested, cap wtd) % %
Changes to the Investment Policy Statement requires Finance Committee and Board approval. We can implement the fixed income portion without needing to change the policies. Developing the language and understanding the issues facing the board will hold off the implementation of the equity portfolio but we can track the results on paper and share the information in a public discussion going forward.

12. Annual Performance: 2011-2017 Year BAIII - UWBA Model Russell 3000
1.56%
1.01%
2012
20.95%
16.37%
2013
33.38%
33.46%
2014
16.29%
12.54%
2015
0.82%
0.47%
2016
13.99%
12.64%
2017
27.43%
21.97%
Inception Cumulative
179.04%
141.90%
Inception Annualized
15.79%
13.45%

13. BAIII Public Equity Multi-Manager Fund

14. BAIII Fixed Income Multi-Manager Fund

15. BAIII Real Estate Multi-Manager Fund

16. BAIII Private Equity Multi-Manager Fund
Bay Area Council Equity Fund/DBL Investors
Double-bottom-line venture investing in Bay Area
example
Pacific Community Ventures
Venture and social enterprise loan fund, low-moderate income areas
Bay Area Centric Incubators
Green tech, impact start-ups, local focus

17. BAIII Infrastructure Multi-Manager Fund
Bay Area TOAHD
Bay Area Transit-Oriented Affordable Housing Fund
Solar Mosaic
CalCEF: California Clean Energy Fund
California Infrastructure Bank “The I-Bank”
Public Private Partnerships
Hunters Point, Bay Meadows, Presidio, GBI

18. Super CD: The Bay Area C-Note
CDFIs offer local impact, safety in savings
New Resource Bank
Community Bank of the Bay
Northern California Community Loan Fund
Bay Area Transit Oriented Affordable Housing Devel. Fund
Beneficial State Bank & Foundation
Low Income Investment Fund
Pacific Community Ventures

19. Target Asset Owners
Community Foundations
Community Foundations
Quasi-Public & Private
Foundations
Quasi-Public & Private
Foundations
Endowments
Endowments
Public Retirement Plans
Public Retirement Plans
Private & Corporate Retirement Accounts
Private & Corporate Retirement Accounts
IRA, 401(k), defined contribution plans, private trusts, family offices
IRA, 401(k), defined contribution plans, private trusts, family offices
Our Goal: Channel 1-2% of this >$100 billion market into impact investments in the Bay Area

20. The Impact Investing Intermediary
Increased Services
Integrate ESG factors and corporate activism
Community Foundations
Stocks
Allocate portion for place-based mission aligned bonds
Quasi-Public & Private Foundations
Bonds
Seek and prioritize sustainable local impact
Increased SF Bay Economic Prosperity
Endowments
Real Estate
Target regional co-investing in public / private partnerships
Public Retirement Funds
Infrastructure
Expect long term local company formation and job creation
Private & Corporate Retirement Accounts
Private Equity / Venture Capital
Enhanced Wealth Creation
Investment
Centralizing and Collaborating

21. Regional Impact Investing Collaboration
Sharing due diligence cost and specialization
Acting as a clearinghouse for investment opportunities
Providing diversification of capital sources and investments
Speaking with a common voice and concentrated impact
Sharing performance and impact monitoring
It makes sense to work together on our regional investments

22. Benefits of Regional Impact Investing
Brings together capitalism, entrepreneurship and innovation for regional interests
Upgrades transit and housing sooner
Provides prudent market-like returns and ancillary positive impacts
Connects asset owners to better outcomes for our community in the long term
Builds resilient, sustainable prosperity into our communities
Investing in our own backyard

23. P3 and the Complex Capital Stack
Equity Risk, Grants
Pay-For-Success notes
Low interest rate loans/guarantees
MRIs and PRIs
Public resources and subsidies
Tax credits & incentives
Senior/fiduciary capital
Public Resources
Tax credits and incentives
Risk Capital
Grants, PFS notes
MRIs & PRIs
Low interest rate loans
Senior / CDFI Capital
Private/Fiduciary Capital
Getting out of Silos and into Public Private Partnerships

24. Place-based Investing/Place-making
When Place is your mission, collaborate.

25. Resources on Impact Investing
Bay Area Impact Investing Initiative
UK Taskforce Social Impact Investing:
Mission Investors Exchange
ImpactBase
ImpactAssets
KL Felicitas Foundation
Global Impact Investing Network
Creative Place-making:
Seal Cove Financial research :