Transform Finance

🤔 Curious about investing in Employee Ownership? 🔥 Join us on August 20th (9am PT / 12pm ET) to hear the core insights from our soon-to-be-released briefing: “Investing in Employee Ownership: Overview For Mission-Oriented Investors” 💫 The briefing isn’t quite ready to be released but we couldn’t wait to put this event on your calendars! In addition to sharing highlights from the report, we’ll also hear from Aner Ben-Ami Ben Ami of Candide Group, an advisor who has supported investments into several Employee Ownership funds. ➡️ This webinar will be different, too. By popular demand, we’re tacking on 30 minutes for conversation and community building in smaller groups so we can continue to deepen connections and support for each other’s work.

We’re excited about 2 webinars featuring our Program Director Julie Menter coming up in the next few weeks! ⭐ June 24th: The Evolving Landscape of Employee Ownership Investing with Alison Lingane and Felipe Witchger. Registration: https://lnkd.in/earvkCC9 🔥 July 18th: How Alternative Ownership Enterprises Can Drive Social Transformation, specifically focused on startups and VC investors. Thank you lfca.earth - Community | Leaders for Climate Action for hosting! Registration: https://lnkd.in/egaqPQ5X

Curious about how your corporate structure can help deepen your impact? I'm speaking on this topic at an upcoming lfca.earth - Community | Leaders for Climate Action webinar on July 18th. The conversation will focus on how startups and startup investors can use this powerful, yet underappreciated, point of leverage ��� Register now: https://lnkd.in/gxqjZ3UK

There has been a lot of talk recently about private equity funds embracing Employee Ownership (EO). The Ownership Works initiative has been covered in 60 Minutes and on Freakonomics radio. Blackstone announced they are also going to embrace EO in their US private equity portfolio. The stated motivation for private equity is: sharing a company’s financial success aligns incentives between employees and managers, which in turn leads to business success. It has us asking the following questions: ❓Is the PE model of EO true Employee Ownership? The private equity firms typically grant only a small portion of the company’s shares to its employees. In contrast, the widely accepted employee ownership models of ESOPs, ESOPeratives, EOTs, and Worker Cooperatives grant at least 30%, and up to 100%, of a company’s equity to a broad-base of employees. ❓Are there decision making rights shared with workers along with economic rights? Governance is an important ingredient for the overall wellbeing of workers, but it’s often missing in these private equity models. As our colleague Julie Menter emphasized in a recent New York Times article about Ownership Works, “As long as everybody agrees, it can work fine but if there’s a true disagreement, then the employees don’t have formal governance power, which makes a difference.” ❓Is economic ownership enough by itself to boost profits? Ownership may not lead to the investor alpha by itself. As Ellen Frank-Miller, PhD stated recently in ImpactAlpha, creating "organizational identification" among workers and creating "social exchange obligation" between workers and managers is the real driver of financial results. ❓Who is getting the better deal, workers or investors? The private equity approach, while it can provide a substantial bump in income for workers (if the company does well), the payout is far smaller than what the investors themselves receive. As such, it likely does not reduce the persistent wealth gap. ❓What might strengthen the model? The private equity interest in EO is a great open door to engage the conventional finance sector in improving conditions for workers. In terms of opportunities for improvement, Delilah Rothenberg of the Predistribution Initiative highlighted some important considerations in a recent ImpactAlpha article: “Commitments like Blackstone’s are strong steps in the right direction, but narrowing the wealth gap at a system-level will also require private equity firms to consider the proportion of equity shared with workers, whether they are also paid a living wage in addition to contingent equity upside, the capital structure of these companies and ability to tolerate market cycles, diversification of workers’ investments, and whether worker voice is also upheld through freedom of association and collective bargaining.” 

Want to dig deep into investing in Employee Ownership (EO)? Join us for our next webinar on June 24th (10am PT / 1pm ET), co-hosted by Catholic Impact Investing Collaborative / Francesco Collaborative. Register today! While the interest in EO is growing rapidly, it can be hard for investors and investment advisors to know where to get started. How can one make sense of the sea of acronyms? What are the highest impact approaches? What range of returns can be expected? Joining our colleague Julie for this informative conversation are two leaders from the employee ownership and impact investment spaces: Alison Lingane, founder of the Employee Ownership Catalyst Fund and Felipe Witchger, co-director of the Catholic Impact Investing Collaborative / Francesco Collaborative. Register here: https://lnkd.in/earvkCC9

Lots of good Transform Finance moments here at Total Impact Summit in Philadelphia yesterday and today: Curt Lyon led a workshop with Francisco Garcia at Just Futures on investing in the Emergent, Regenerative economy. He focused on our work on Alternative Ownership Enterprises, Participatory Investment models, and community owned real estate as examples of the regenerative economy. Thanks to all who showed up and vulnerably shared their perspectives! Andrea Armeni participated on the closing main stage plenary with Jessica Norwood, Lindsay Smalling, Natasha Lamb, and Enith Williams - plenty of mic drop moments, especially from Jessica: “if your investments aren’t reparative, they’re exploitative.” We appreciate especially the discussions of power in capital, and letting ourselves dream of a new finance system. Thanks to ImpactPHL for hosting a wonderful event!

Maybe it's just my obsession with enterprise governance and impact, but it seems like such a big piece of the AI / LLM conversation. Kudos Lyel Resner and Dr. Wilneida Negrón for putting this front and center in your ImpactAlpha piece.

Enjoyed hosting a conversation about scaling financing for employee ownership at the The Aspen Institute Employee Ownership Ideas Forum today. 💬 Everyone came to the conversation from different perspectives but agreed that we are at a unique moment for employee ownership, with lots of promising innovation. #TalkOwnership #EmployeeOwnership

We have a short-term data entry opportunity to help improve the accuracy of our CRM system. Great for a student or new entry into the field of impact investing looking to get exposed to our broad audience base. If you or someone you know may be interested, please reach out to sophie@transformfinance.org! We'd appreciate shares within relevant servs/groups/etc.

We have 2 great webinars coming up in April! 🔥 On April 3rd - Learn how & why investors are choosing to back Alternative Ownership Enterprise funds with Demetric Duckett, Humaira Faiz, Thomas Knowles and Ishita Shah. Register now: https://lnkd.in/eA7gBjw5 ⚡On April 25th - We're co-sponsoring a webinar with Just Futures on how to design an equitable retirement plan. Register here: https://lnkd.in/eitEu5ZC