ImpactAlpha, September 13 — Boston-based Arctaris Impact Investors partners with foundations, governments and other organizations to help revitalize local U.S. underserved communities, and catalyzing private capital for sustainable jobs, affordable housing and health infrastructure.
“Arctaris’ funds put up 80 percent of the capital and the local community, or in some cases state government or federal government will put up the other 20 percent,” Jonathan Tower, the firm’s founder and managing partner, told ImpactAlpha. “That blended finance structure allows us to accomplish things that private equity firms, philanthropy and government wouldn’t be able to do on their own.”
The impact fund manager is looking to execute this strategy with the OZ vehicle in Pittsburgh’s Allegheny and Westmoreland counties, where it will target 72 low-income census tracts. Although Pittsburgh has had tremendous economic growth over the past few decades, “dozens of Opportunity Zone neighborhoods are disconnected from traditional capital,” said Lee Kimball, a Pittsburgh local Arctaris hired to lead the effort.
The vehicle will focus on closing up that disconnect by investing in local businesses, clean energy and internet access, housing and more. Arctaris will create an advisory committee to ensure local and diverse stakeholder engagement throughout the program’s investing period.
The Arctaris vehicle made its first investment in S&K Holdings and its affiliate Family Choice Healthcare, a Black-owned home healthcare company for the disabled and elderly groups. The investment will help S&K expand and create more than 300 jobs for “vulnerable communities” in Pittsburgh, said owner Steve Taylor.
Arctaris formed a partnership with Pittsburgh-based Richard King Mellon Foundation, which committed the first $4 million to launch the vehicle. “Private investment is the most effective way to create prosperity at scale,” said the foundation’s Sam Reiman.
The commitment “will bring new private investment to Allegheny and Westmoreland counties.” Arctaris’ OZ funds, which are primarily backed by institutional investors, committed the rest of the capital.