P

a

r

t

n

e

r

P

r

o

f

i

l

e

|

A

l

i

g

n

I

m

p

a

c

t

Written by: Julia Mazzola, Finance & Investment Associate

Earlier this month, we announced the launch of the FRB Catalyst Facility, our first pooled investment vehicle for Forest Resilience Bonds, specifically aimed at catalyzing expansion to new landscapes across Oregon, California, Washington, and potentially other states. Building off of the original multi-stakeholder model of the FRB, the Facility is designed to finance a portfolio of FRBs with a revolving loan structure, enabling each dollar invested to cycle through multiple projects. This creates a unique opportunity for investors to leverage initial investments into a target of at least 5x impact returns.

The Facility is expected to finance at least $50 million in forest restoration work across 10+ FRBs, targeting impact outcomes including wildfire risk reduction, community resilience, and healthy watersheds, among others. To date, the Facility has received $12.25 million in initial commitments from 10 investors, four of whom are under the advisement of Align Impact.

Align Impact is an independent, impact advisory firm working alongside individuals, families, foundations, institutions, and advisors to develop specialized impact strategies achieving clients’ unique impact goals. The firm was founded in 2014 and has grown significantly over the last eight years, from a team of three to a team of 22. Throughout this expansion, they have remained 100% impact focused, helping transition traditional investments to impact-aligned frameworks. The firm currently has over $2 billion in assets under advisory.

Initially focused on public market investments, Align Impact discovered a need for more targeted impact approaches than the public markets alone could provide. The solution was to deploy more client capital to private market investments and direct deals, but this required greater client education and sector knowledge. In response, the Investment Research team at Align Impact expanded their specialization across all asset classes, impact areas, and geographies, with each team member gaining critical expertise.

“A lot of the funds we were working on previously were diversified; think large private funds that are deploying capital across climate, social justice, and nature-based solutions, among other things,” explained Director of Catalytic Capital, Ishita Shah. “We’ve gone into much more pointed strategies, like Blue Forest, which has been amazing because clients who are very leaned into, say, conservation, are able to put a lot more of their dollars and effort towards that goal.”

Around three years ago, through desk research and reading about Blue Forest in the press, Shah learned about the organization and connected with Blue Forest CEO, Zach Knight. While there were no open investment opportunities at the time, they stayed in touch, eager to find future opportunities to work together. In the years following, Align Impact and their clients increasingly pursued nature-based solutions, searching for unique models in this challenging space. Shah also focused on building out the Catalytic Capital practice within the firm, identifying impact gaps that exist and require special financial features, which many Align Impact clients are well positioned to invest in given their portfolio flexibility and interest in trying something new.

When the FRB Catalyst Facility was launched, the fit was clear.

“We’re leaning into nature-based solutions. One of the challenges we’ve seen is that it’s really hard to invest in conservation. The end beneficiary for a lot of conservation work is the planet, and the planet can’t pay investors, so it actually makes revenue-generating a difficult idea to accomplish in the conservation space. We’ve been looking at different unique models that are able to achieve this. What has really made Blue Forest stand out is their ability to structure an investment model that doesn’t really exist yet. Blue Forest is piloting something new, and that’s really attractive to our clients who are leaning into catalytic investing,” voiced Shah.

Align Impact prides itself on being the connection point between a variety of groups, working with entrepreneurs and fund managers, research institutions and nonprofits, and capital allocators. The firm is dedicated to helping clients and stakeholders understand that conservation efforts take time and patience. Nature-based solutions might require unique solutions like longer lock up periods or multi-stakeholder models to lower the cost of capital. Nevertheless, these solutions are to be celebrated, creating new ways of unlocking impact that are very hard to achieve.

“I think Blue Forest and Align play a great connector role for many different stakeholders who care deeply about impact. This opens up exciting opportunities for us to partner, bringing the variety of stakeholders that we have access to together, in order to create something unique for the future,” concluded Shah.