Impact Investing

Quality job creation + strong economic returns

Managed by a team of diverse investment professionals, HCAP Partners is nationally recognized for its commitment to improving job quality and thought leadership through the Gainful Jobs Approach™. The firm actively works to set industry standards as a mission-driven fund manager and has been an ImpactAssets 50 fund since 2014.

Investing with a Vision

HCAP Partners was founded with a mission to generate top-quartile returns while having a positive impact on underserved businesses and their communities. HCAP provides growth capital to underserved businesses and works with companies to improve job quality, particularly for low- to moderate-income (LMI) individuals, women, and people of color.

Included below are 2023 year-end results for HCAP IV and HCAP V – HCAP’s most recent impact funds. For more details see HCAP’s 2023 annual impact report.

HCAP 2023 Annual Impact Report

HCAP IV and HCAP V 2023 IMPACT METRICS

HCAP IV*HCAP V*
Fund Vintage Year20182021
Total Companies1712
Total Capital Invested$166.9 M$162.9 M
% of Capital Invested in Underserved Businesses**72%57%
Total Jobs4,685966
% of Quality Jobs under the Gainful Jobs Approach™76%88%
% LMI Workforce73%41%
% Female Workforce79%44%
% Diverse Workforce63%38%***

Notes

*Data for active companies as of 12/31/2023 and exited companies as of the last period of data collection prior to exit.
**Underserved businesses are defined as headquartered in a LMI census tract or employing a majority LMI workforce.
***Race and ethnicity data is unavailable for 26% of HCAP V employees. HCAP is working with portfolio companies to enhance data collection.

The Gainful Jobs Approach™️

HCAP is considered among the first private equity firms to develop and successfully implement a quality jobs strategy across its portfolio companies through its Gainful Jobs Approach™. This operational impact framework spans the investment lifecycle, from initial investment diligence through to a liquidity event. The Gainful Jobs Approach™ uses a robust quantitative measurement system to assess job quality standards and improvements over time and includes active portfolio engagement to identify and implement workplace initiatives aimed at creating and maintaining high-quality jobs.

OVERVIEW OF THE GAINFUL JOBS APPROACH™ PROCESS

  • 1. THE BASELINE ASSESSMENT

    HCAP works with company management to gather HR/payroll and workforce data and conducts a baseline assessment to examine company workplace practices and job quality prior to investing.

  • 2. STRATEGIC ROADMAP

    Utilizing the assessment, HCAP and management develop a Strategic Roadmap that documents company-specific job quality goals to be achieved over 3-5 years. The Strategic Roadmap is a condition of investment close and is integrated in company value creation plans.

  • 3. COMPANY ENGAGEMENT

    HCAP meets quarterly and engages with companies to review Strategic Roadmap progress and job quality results, provide resources, and aid implementation of workplace practices and initiatives.

  • 4. DATA COLLECTION AND ANALYSIS

    HCAP collects and analyzes job quality data from companies’ HR/payroll systems, workplace practice surveys, and employee engagement surveys biannually. HCAP shares job quality results, key findings, and insights with companies to inform job quality improvements.

  • 5. EXIT RESPONSIBLY

    HCAP and company management review overall progress and lessons learned from collaboration on the Gainful Jobs Approach™ as part of an exit interview. HCAP and the company also execute “carrot agreements” that provide frontline workers with cash bonuses upon successful exit so they share in the upside of the transaction; HCAP and company leadership ensure that the bonus pool is distributed equitably to employees.

GAINFUL JOBS APPROACH™ FRAMEWORK AND KEY ATTRIBUTES

The Gainful Jobs Approach™ framework is organized across the themes of Economic Opportunity, Diversity, Equity & Inclusion, and Health & Wellness. Within these themes, HCAP focuses on improving job quality across six key attributes: Broad-Based Participation, Opportunities for Advancement, Sustainable Livelihood, DEI: Belonging, Paid Time Off, and Wellness Initiatives.

As a growth capital provider, we collaborate closely with our portfolio companies on value creation activities that help them scale, win market share, and generate revenue. One key lever in supporting portfolio companies’ growth plans is helping them become employers of choice and create great places to work—attracting and retaining talented team members and enhancing productivity.

    • Broad-Based Participation:
      Focuses on mechanisms that support employee wealth creation beyond regular compensation such as 401(k) plans, employee bonuses, and stock option plans. 

    • Opportunities for Advancement:
      Captures policies and practices that support the upward mobility and skill development of employees such as ongoing training post-onboarding, regular performance reviews, fair hiring and career advancement policies, and recruiting from within.

    • Sustainable Livelihood:
      Examines whether employees are provided a living wage that offers sufficient income to meet minimum standards of living in their community. In addition, Sustainable Livelihood accounts for formalized compensation policies and practices that help ensure individuals are paid competitively and are rewarded with increases for their performance and contributions to the company.

    • DEI: Belonging:
      Focuses on policies, practices, and trainings that support inclusive work environments where employees thrive and are able to make meaningful contributions to their company. This includes trainings and policies that promote physical and psychology safety and prevent sexual harassment and discrimination, flexible work arrangements, employee grievance mechanisms, employee resource groups and culture committees, childcare benefits, pay equity analyses, and more.

    • Paid Time Off:
      Allows employees to take time away from work without forgoing pay. Paid time off captures time away to heal when sick or injured, mourn the loss of loved ones, care for sick family members, recharge during vacation, and prepare for or welcome new additions to the family.

    • Wellness Initiatives:
      Encompasses health insurance and other wellness benefits that help employees attend to their physical and mental health needs such as dental and vision benefits, employee assistance programs, flexible spending accounts, gym stipends, and more.

Industry Participation & Field-Building

HCAP Partners plays an active role in field-wide initiatives to help shape the impact investing ecosystem and promote systems change and positive impact beyond its direct work with companies. This has included sharing of best practices and lessons learned from HCAP’s investments, participation in programs to cultivate the next generation of diverse investment talent, research to make the business case for investing in quality jobs, and development of industry norms and standards for impact measurement and management. In addition, as a longstanding member of the impact investing field, HCAP has supported the formation of new industry bodies and organizations to help build the impact investing ecosystem. HCAP was a founding member of the Global Impact Investing Network (GIIN) and Impact Capital Managers (ICM). HCAP’s Hope Mago serves as the ICM, Inc. Board Chair.

We are proud to support HCAP Partners and its work to unlock resources for underserved businesses so they have the tools they need to grow, spurring new opportunities and high-quality jobs where they're needed most." 

– Roy Swan, Ford Foundation Director of Mission Investments