SoLa Impact, a leading urban real estate fund, announced the launch of its $1 billion ‘Black Impact Fund,’ which will invest exclusively in Black and Brown communities in major urban markets. The fund will be comprised of a $500 million Opportunity Zone (OZ) Fund and a side-by-side, $500 million non-Opportunity Zone Fund. Martin Muoto, CEO of SoLa Impact and founder of the Black Impact Fund, stated, “After a decade of successfully investing in Los Angeles’ African-American and Latinx communities, we have learned a great deal about how to deliver near-term and long-term dividends for both the investors and the community. Ultimately, it is about creating shared prosperity and racial equity. In light of all the country is going through, it is clear the size and scope of the problem requires a bold and ambitious response. The time to act is now.”
SoLa Impact was recognized earlier this year as the nation’s Top Urban Opportunity Zone Fund by Forbes Magazine and Sorenson Impact. In addition, the company was also named the 7th fastest growing minority-led private company by Inc. Magazine’s 2020 Inc5000 list. Muoto added, “While we are thrilled about the recognition we have received, we are most focused on delivering solid returns while realizing true social impact. We believe that to achieve superior returns, investments in communities of color require diverse fund managers that are intentional and inclusive in their strategy.”
One of the unique features of the Black Impact Fund will be a novel way to ensure the communities also benefit from the Fund’s investments. Thirteen percent of all asset appreciation and fees earned will go toward funding an affiliated, not-for-profit – The Black Impact Community Fund. The Black Impact Community Fund will be able to leverage the for-profit Fund’s size, operating efficiency, and purchasing power to build “for-sale” housing for community members to purchase at cost – encouraging home ownership and further enabling the community to participate in wealth creation. In addition, the Community Fund will also partner with faith-based organizations, local governments, and other non-profits to better utilize surplus land and underutilized lots for affordable housing or related projects prioritized by community stakeholders.
Sherri Francois, the Chief Impact Officer of the Black Impact Fund, added, “13% is an important number – not only because it represents a very meaningful ‘impact allocation’ that goes directly towards the communities we invest in – but it also represents the percentage of African Americans in the U.S. and pays homage to the Thirteenth Amendment.” The Black Impact Community Fund will continue to expand SoLa Impact’s tradition of ensuring access to education by providing academic scholarships and building technology learning centers for young people. In 2019, the Black Impact’s predecessor fund, SoLa Impact, provided over $100,000 in scholarships; in 2020, SoLa Impact’s foundation is awarding over $1 million in vocational scholarships to South LA residents, aided by the generosity of the Oprah Winfrey Charitable Foundation, Jimmy Iovine, and several leading philanthropists and corporations committed to racial equity.
Muoto comments: “One of the biggest criticisms of Opportunity Zones has been ‘How does the community participate in economic gains that are created?’ To be candid, until now, we have not had a great answer. But the Black Impact Community Fund answers that question.” In addition, the side-by-side $500 million non-Opportunity Zone Fund allows endowments, foundations, pension funds, and other mission-aligned institutional investors that have previously not been able to participate in the Opportunity Zone tax benefit, to invest and become meaningfully involved. “While we believe the Opportunity Zone legislation has the potential to significantly benefit these communities, the areas designated as OZs have been somewhat inconsistent. As a result, we are seeing incredible deals literally ‘across the street’ from our Opportunity Zone properties that our OZ Fund could not invest in. The side-by-side non-OZ structure allows the Black Impact Fund to access undervalued real estate assets and broaden its reach and its impact.”
The Black Impact Fund will partner with regional developers to enable greater access to capital and to create local jobs. The Fund’s sponsors have already been approached by dozens of developers and several city mayors to help bring the Black Impact Fund’s OZ and non-OZ capital to underserved and underinvested communities.
“Our local partners gain the benefit of our experience in investing in Black and Brown communities; our rigorous operating procedures and financial reporting; our national, volume-based purchasing platform; and importantly, our programs to deliver real and sustainable social impact. These levers materially drive down the costs of development and construction, which results in higher-quality, lower-cost housing for the community and better returns for the investors and developers. We believe this inclusive model will give us access to better investments and stronger partnerships – particularly in communities of color where minority-led builders, architects, and developers have struggled to access capital.”
Muoto concluded, “In many ways, the Black Impact Fund is really a full realization of our motto of ‘Doing Well by Doing Good.’ There is now a broad consensus that investing in African American and Latinx communities and fund managers is critical; and dozens of banks, Fortune 100 companies, foundations, and endowments have made public commitments to do so. The Black Impact Fund is about creating practical solutions to the growing racial and income inequality that continues to polarize the country.”
About the Black Impact Fund
The Black Impact Fund is a family of real estate related funds with a double bottom line strategy focused on investing in Black and Brown communities in major urban markets. Its founders have a proven track record in leveraging data-driven social impact strategies to deliver superior financial returns. The Black Impact Fund combines a unique structure of an Opportunity Zone fund investing alongside a non-Opportunity Zone fund and a non-profit, Black Impact Community Fund, designed to ensure community members participate in the gains created. See www.blackimpact.com.
Black Impact Fund
Karen Lewis at 323.424.9400 or email: firstname.lastname@example.org