Greetings, Agents of Impact!
Featured: Returns on Inclusion
Collective ownership, renter payouts and neighborhood trusts expand access to housing wealth. Late on a September Friday, a dozen or so Latina small-business owners gathered at the headquarters of Just, a community development financial institution in Austin, Texas. The women were veteran borrowers, having taken more than one “microloan” to start or grow their jewelry, cleaning and event planning businesses into livelihood enterprises that paid their bills. This day, their ambitions were higher: to own their own homes and build generational wealth. Just’s new “wealth club,” they were told, could turn them from borrowers and entrepreneurs into real estate investors. The microlender’s partnership with real-estate crowdfunding platform Arrived Homes, along with $250,000 from Schmidt Futures, will enable the women to collectively invest in a portfolio of rental homes, receive regular dividends and appreciated value, and get into the housing market. Separate funding from JPMorgan Foundation will help Just expand the model to Black female business owners. “There’s an unmet need here,” Just’s Haydee Moreno tells ImpactAlpha. “There’s a demographic that is hungry for these kinds of investments. They understand it, and they’re eager to get in the game.”
- Housing wealth. Just’s venture into “client asset ownership” is part of a drumbeat of efforts around the country that aim to address persistent wealth gaps by expanding access to housing wealth and homeownership. Innovative funds and fund managers taking aim at long-standing barriers include Denver-based Dearfield Fund for Black Wealth, which earlier this month secured $7.5 million to help Black first-time homebuyers make down payments. Enterprises’ Renter Wealth Creation Fund will give longtime residents of affordable housing properties in the fund an opportunity to receive a payout when the property is refinanced or sold. In Boston last month, East Boston Community Development established a neighborhood trust to acquire 114 units across 36 multifamily properties to preserve as affordable.
- Scaling impact. Just built its client base through microlending to small business owners. “The way we meaningfully create community transformation is by going deeper into ownership,” says Just’s Steve Wanta. The participants in Just’s wealth club, designated as Just Entrepreneur Trust Agents, will be staked to equity in the real estate portfolios via the grant capital. To have “skin in the game,” they will give up Just’s $1,000 loan-loss reserve, which Just provides to encourage them to take risk. “We are always looking for new models that disrupt antiquated and inequitable systems,” says Schmidt Futures’ Kumar Garg. “We want other leaders across sectors to take note and help promising ideas like this scale.”
- Keep reading, “Collective ownership, renter payouts and neighborhood trusts expand access to housing wealth, by Dennis Price on ImpactAlpha.
Sponsored by Mission Investors Exchange
How MacArthur Foundation leverages a full continuum of capital for climate action. The Chicago-based foundation is committing grants, catalytic capital and sustainable investments to climate solutions to “acknowledge the urgency of this moment, and the ambition that is needed to tackle this existential challenge,” MacArthur’s John Balbach, Caixia Ziegler and Jorgen Thomsen write in ImpactAlpha’s series with Mission Investors Exchange. MacArthur Foundation president John Palfrey will discuss the foundation’s climate and environmental justice work at MIE’s national conference in Baltimore next month.
MacArthur is awarding $450 million in grants for “big bets” in clean energy and other greenhouse gas emissions reduction projects. The foundation backs community and equity-centered climate justice initiatives like the Hive Fund for Climate and Gender Justice. Catalytic capital and impact investments have gone into climate innovation (Azolla Ventures), historically marginalized communities (Inclusive Prosperity Capital), and clean energy in emerging markets (Encourage Solar Finance).
- Keep reading, “How MacArthur Foundation leverages a full continuum of capital for climate action,” by MacArthur Foundation’s John Balbach, Caixia Ziegler and Jorgen Thomsen.
- Join the conversation. MacArthur’s John Palfrey will discuss “Climate and environmental justice,” with McKnight Foundation’s Tonya Allen, Surdna Foundation’s Don Chen, and David Rockefeller Fund’s Tamara Larsen at the MIE national conference in Baltimore, Dec. 5-7. ImpactAlpha is a media partner. MIE members and philanthropic asset owners can register here.
Dealflow: Muni Impact
Investor demand for Atlanta’s $369 million ‘social bond’ cuts city’s interest payments. Under the banner of “Moving Atlanta Forward,” the city raised $410 million in general obligation bonds this month, including $369 million designated as “social” to fund recreation, transportation, public safety and other capital projects. Social bonds, which raise funds to finance projects with social benefits, have proved popular with environmental, social and governance, or ESG, investors. Atlanta’s inaugural social bond series drew orders of more than $1.2 billion from 54 institutional investors. The strong demand enabled bond yields to be reduced by two to five basis points, depending on the maturity. Atlanta’s social bond framework was reviewed by Morningstar Sustainalytics.
- Muni edge. The issuance follows New York City’s first social bond in September, which raised $400 million for affordable housing projects and similarly allowed the city to lower its cost of capital. “Long term, it brings a whole new set of investors to the city’s program,” Tim Martin with NYC’s Office of the Comptroller, said on ImpactAlpha’s recent Agents of Impact Call. Atlanta’s chief sustainability officer Chandra Farley told ImpactAlpha that bond proceeds will go to parks, recreation centers, public safety facilities, and city buildings “all priority places where we need to take climate action.”
- Dig in.
Schroders launches U.K. real estate impact fund with £10 million. U.K.-based asset manager Schroders Capital committed £10 million ($11.9 million) to a new fund that will invest in some of Britain’s most economically-depressed regions. Schroders is aiming to reach a £150 million first close early next year and is aiming to grow to £1 billion within three years. The fund, with a focus on developing affordable homes and workplaces in depressed urban areas and repurposing mixed-use town centers, is targeting a 7-8% net return, said Schroders’ Chris Santer.
- Closing the gap. One aim of the fund, said Schroders’ Sophie van Oosterom, is narrowing social inequality exacerbated by the Covid pandemic “in more deprived areas in the U.K.” Place-based impact investing is picking up steam in the U.K. In June, impact investor Bridges Fund Management stood up a £350 million property fund to invest in healthcare, low-carbon logistics and affordable housing. This month, property investment firm Orchard Street launched a £400 million impact fund to invest in decarbonization of buildings in its portfolio and in making the buildings healthier for tenants.
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Dealflow overflow. Other investment news crossing our desks:
- BlueOrchard launched a $135 million listed impact bond strategy for Japanese investor Daido Life Insurance.
- MassMutual Ventures committed $100 million to invest in 15 to 20 early and growth-stage climate tech companies in the U.S.
- Paris-based Fairmat raised €34 million ($35.4 million) in Series A funding to recycle advanced materials like carbon fiber composite.
- Netherlands-based Circularise scored €11 million ($11.4 million) to repurpose chemicals, plastics, battery materials and other industrial supplies.
Agents of Impact: Follow the Talent
Gary Community Ventures’ chief investment officer Santhosh Ramdoss will replace Mike Johnston as president and CEO… Victoria de Castro, ex- of World Benchmarking Alliance, joins The Predistribution Initiative as an associate director… LISC is hiring a manager of legal operations in New York… Mott MacDonald seeks a senior consultant for climate policy and finance in London… Sunwealth is recruiting an asset management associate in Cambridge, Mass… Loring, Wolcott & Coolidge Trust is hiring a sustainability associate in Boston.
Maliasili is looking for a portfolio manager in Southern Africa, and a portfolio associate and manager in East Africa… Social Finance has an opening for a director of healthcare impact investments… The Robert Wood Johnson Foundation is hiring an impact investments analyst in Princeton, N.J… Montana Healthcare Foundation seeks a senior program officer in Bozeman, Mont… Employee-owned global investment management firm Neuberger Berman is looking for a private markets global investment solutions associate in New York.
Also in New York, Rockefeller Capital Management seeks an investment client portfolio manager, and the GIIN is recruiting a training and accreditation manager… EYElliance is hiring a remote senior manager of sustainable financing… TAS is looking for a manager of impact measurement in Toronto… The University of Pennsylvania seeks a senior policy strategist for the Leonard Davis Institute of Health Economics… The Climate Leadership Council has an opening for a director of policy and government relations in Washington, D.C.
The Global Innovation Lab for Climate Finance secured $2 million from the U.S. Department of State to develop new financial instruments and mechanisms to harness private investment for climate adaptation… The White House Office of Science and Technology Policy will host an electrification summit, Wednesday, Dec. 14.
Thank you for your impact!
– Nov. 28, 2022