Major milestone - Vancity is Brighter Investment’s first institutional Investor

Funded by a crowdfunding campaign for the first cohort, followed by Impact investors for subsequent years, we have been investing in the higher education of the brightest students since 2015. Gradually building a successful track record has convinced investors to make larger investments and has allowed us to grow our cohorts. The long term objective has always been to prove the model to institutional investors who have the capital to really scale it up. With Vancity as our first institutional investor we’ve made a large step forward towards that goal.

Every year, 60 million [1] of the smartest students graduate high school in a developing country, but despite their talents can’t afford to continue their education. There are no student loans and very few scholarships. The tiny portion of these students that do get the opportunity to pursue higher education through Brighter Investment increase their income 5X, are 6X less likely to be unemployed, pay 10X more taxes and contribute to the development of their economies. The social impact as well as the economic value of properly educating all 60 million of these bright students, in public and private institutions, from online coding bootcamps to 6 year medicine degrees, requires an estimated $600BN dollars [2]. An amount out of reach for local governments and charities. 

Worldwide capital available for philanthropy versus investment assets under management [3]

The only source of capital that has the capacity to realize this value creating opportunity at scale are the institutional investors. There are currently over $23 trillion of ESG/SRI assets under management--over 60 times the total amount of capital committed to philanthropy [3]. And over the last 8 years, these investments have outperformed the total investment market both in financial returns and market growth [4]. That is why, the mission of Brighter Investment has always been to prove to institutional investors they should put money towards higher education in developing countries. We are extremely proud to announce that Vancity is the first institutional investor that has performed its due diligence and deemed our model sufficiently proven to invest in it.

Impact - How much faster would we have Covid-19 under control if we had double the number of medical scientists working on possible vaccins? How much faster would we develop cheap production methods for sustainable energy with twice as many engineers working on their ideas? Imagine double the number of agricultural scientists working on solutions that improve yield and reduce environmental impact from food production. But instead of helping to solve these pressing problems, some of our smartest people end up wasting their talents as subsistence farmers, or street vendors. 

By providing investors with the opportunity to invest in a diversified portfolio of the brightest students for a share in the created value, we are changing the higher education funding ecosystem. Every student we support today provides us with one more proofpoint we can use to convince new investors that our students represent a worthwhile value creating opportunity. Each new investor brings us one step closer to a world where every talented student, students like Jacinta, can reach their full potential, irrespective of family wealth, gender or place of birth. 

Vancity - Vancity is a values-based financial co-operative serving the needs of its more than 543,000 member-owners and their communities with 60 branches in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay. With $28.2 billion in assets, Vancity is Canada's largest community credit union. Vancity uses its assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable [5]. Investing in the world’s brightest students is a perfect fit for this mission.

What’s next? - Ideally, a market place emerges, based on institutional capital, where various competitive financing offers are available to students. Operating in this marketplace, our years of data on what factors determine a student’s success will ensure that Brighter Investment’s underwriting is best in class and will allow us to outperform the competition.

We are very proud that, despite the uncertainty that the global Covid-19 pandemic brings, Vancity stayed the course and continued to believe in the long term value creating opportunity that our students represent. We are extremely grateful for all the work the Vancity team put in analyzing our data to build the investment thesis for their board. It is our hope that the opinion of these professionals will convince others to take the time to study our data and also come to understand this opportunity for what it is. 

Unfortunately we have seen the demand for our financing go up dramatically due to the financial fallout from the Covid-19 lockdowns. At the time of writing, we have 14,032 qualified applicants where the Vancity investment will make it possible to only support a small portion of those. So Investors interested in taking a closer look at this investment opportunity that continues to perform well despite the global pandemic, please contact us at inquiries@brighterinvestment.com.

Sources:
[1] World Bank - World Development Indicators
[2] Estimate based on average cost of Brighter Investment student
[3] JP Morgan - Impact Investments: an emerging asset class
[4] Responsible Investment Association - 2018 Trends Report
[5] Vancity Website