Over the past 25 years I’ve worked to align investing with purpose. I’ve always found it incredibly valuable to share ideas with other impact advocates to learn what challenges they face and how they tackle them. To that end, I was pleased to join Raj Shant, Portfolio Manager at Newton Asset Management, and Alex Bernhardt, Principal and Leader of Responsible Investing at Mercer, for a recent Roundtable Discussion in Pensions & Investments (​Tackling the Challenges of ESG Investing as Opportunities Expand Across Asset Classes​). Reflecting back on this discussion concerning the evolution of ESG and impact investing, a few observations stand out about current trends in impact investing. First, as asset owners...

Today, there is an absolute shortage of 3.7 million units of housing for extremely low income (ELI) renters.1 According to HUD’s website, approximately 109,000 Low Income Housing Tax Credit units on average were placed in service annually between 1995 to 2016. At this rate, it will take 34 years to build the number of units needed for ELI renters. Clearly it will require capital in significant scale to address this problem with greater urgency. We are excited to announce that IMPACT has partnered with Freddie Mac on a new effort to spur further investment in affordable housing. Relying on an existing Freddie Mac security structure, the newly created Private Placement PC Swap...

Volatility returned late last year and may persist for the foreseeable future. A well-diversified portfolio will help to manage such market ups and downs, and an allocation to fixed income can provide a reliable stream of income during periods of market uncertainty. With such strategies in mind, we believe there is an underexposed part of the market that may be attractive for institutional investors: impact investing focused specifically on affordable housing mortgages. While many investors use impact strategies to fulfill a desire to promote social good, we believe that affordable housing has built-in characteristics (along with the low correlation we’ve discussed in previous posts) that make affordable housing debt a source for...

In our last blog, IMPACT presented analysis of the performance potential of affordable housing investments in the post-2008 era. In this follow-up blog post, we’ll examine another opportunity for institutional investors seeking entry into impact investing: The diversification attributes of affordable housing investments. As a sub-sector of the mortgage-backed securities (MBS) market, affordable housing offers additional diversification due to particular characteristics attributable to the affordable housing sector. Generally, that the MBS sector has benefited from strong U.S. real estate fundamentals and favorable supply/demand dynamics; further, the affordable housing sub-sector also benefits from the support of federal low-income housing tax credits (LIHTC) and steady demand for low-income housing. The results have demonstrated solid...

Impact investing has grown beyond equity investments to include opportunities through fixed income investments. Along with green bonds, affordable housing investments are increasingly in the news and, not surprisingly at IMPACT, we believe the business case for these investments in appropriate circumstances, supports the buzz. In this blog and an upcoming companion, we’ll outline the opportunities presented by the affordable housing investments IMPACT pioneered 20 years ago. The state of mortgage-backed securities. A decade ago, loose lending standards, underwriting done on a pro forma basis, and high loan-to-value transactions in the mortgage-backed industry contributed to the economic crash of 2008. Since that time, U.S. financial markets are once again reaching record highs...

Safe, affordable housing is the cornerstone of every community, but it does not make a community. A community needs healthcare, schools, jobs and many other goods and services. Nearly 20 years ago, IMPACT got its start financing affordable housing. But we knew that increasing the supply of quality, deeply affordable housing was not enough. We began thinking about how we might leverage our experience and investor base to create the other building blocks of communities. We had a great foundation from which to start. Since its founding, IMPACT has invested over $1 billion in affordable housing in 41 states plus D.C. We did this by creating a platform that allows us to...

In our previous entries, IMPACT CEO Jeff Brenner and I highlighted the vast need for affordable housing across the United States and offered examples of new affordable housing developments IMPACT has financed to help alleviate the shortage. These examples illustrate the role we play in bridging the gap between Wall Street and Main Street. In our latest blog, I’d like to describe the nuts and bolts of our work by sharing three important components. These “differentiators” are what set IMPACT apart from the growing number of advisers new to the space. They are built upon a set of investment principles (Stewardship; Long-term Focus; Impact; Open-minded & Steadfast; and Opportunistic) which are the...

A couple of weeks back, IMPACT CEO Jeff Brenner shared his point-of-view on the crisis of a lack of affordable housing facing America’s communities. Today, I would like to share my perspective by highlighting two new developments, financed by IMPACT, that are good examples of our efforts to alleviate the shortage of affordable homes—a challenge impacting communities of every size across the nation. According to ECONorthwest, 22 states plus D.C. did not build enough housing between 2000-2015. In fact, production fell short by 7.3 million units. The California Housing Partnership reports that workers in many San Francisco Bay Area communities need to make at least four times the minimum wage (nearly $50...