Dealflow: Follow the Money
Kresge seeds two Opportunity Zone funds, with impact strings attached. The U.S. tax bill that established Opportunity Zones included no requirements that “opportunity fund” investments demonstrate positive social and economic impact. The impact investing community is trying to ensure that they do. The Kresge Foundation is anchoring two Opportunity Zone funds on the condition that the fund managers measure and track their impact. Boston-based Arctaris Impact and Fort Lauderdale-based Community Capital Management are looking to raise a combined $800 million. In return for Kresge’s $22 million in first-loss capital, Arctaris and CCM signed covenants agreeing to prioritize affordable housing development, avoid resident displacement, support living-wage jobs, establish community advisory boards, and prohibit non-productive investments. Kresge hopes the deal becomes a “model for other investors [for] how solid deals can be constructed to meet the needs of investors and communities alike.” Keep track.