New York Life | December 11, 2022
Recent societal events have created the urgency to address economic inequities in the United States and consider creative ways to impact change. At New York Life, we announced our $1 billion impact investment initiative in April 2021 to help address the racial wealth gap in America and expand economic opportunity more broadly, with a goal to invest these funds over three years. Just 18 months later, that milestone has been met, with the company already committing $1 billion to underserved and undercapitalized communities across the country. Of the $1 billion, we committed approximately $300 million, $550 million, and $150 million in support of small businesses, affordable housing, and community development, respectively.
“Since inception, our impact investment initiative has had a dual objective: deliver meaningful societal impacts while also generating investment returns that allow us to build and sustain programs that drive positive economic change over the long term."
—Tony Malloy, Chief Investment Officer
According to Tony Malloy, New York Life’s chief investment officer, “Since inception, our impact investment initiative has had a dual objective: deliver meaningful societal impacts while also generating investment returns that allow us to build and sustain programs that drive positive economic change over the long term. Thus far, that’s exactly what we are experiencing, reinforcing the power of pursuing profits with a purpose.”
Impacts to date
As our investments continue to be deployed and their impacts compound, the full effects of our long-term commitments won’t be realized for years. Nevertheless, impacts at the 18-month mark include:
Supporting small businesses through diverse and emerging fund managers
“A central component of our program focuses on collaborating with mission-aligned organizations with long track records of success and strong relationships with the communities we are trying to reach,” says Martin King, head of impact investments at New York Life. “We created partnerships with some of the leading fund managers and nonprofits focused on closing the racial wealth gap, creating the space for New York Life to amplify the meaningful work they have been doing for years.”
“A central component of our program focuses on collaborating with mission-aligned organizations with long track records of success and strong relationships with the communities we are trying to reach.”
—Martin King, Head of Impact Investments
For example, through a $200 million commitment in support of small businesses, we’re making 20-25 venture capital and growth equity limited partnership commitments in collaboration with Fairview Capital, a Black-owned asset manager co-founded by Laurence Morse, a pioneer in venture fund of funds and social impact investing. Under Morse’s leadership, Fairview invests with rigorously selected, diverse fund managers in Black-owned and other diverse businesses that traditional funders have overlooked.
As one example of this partnership, New York Life deployed investment capital with Base10 Partners, the world’s largest Black-led venture capital (VC) firm by assets under management, which launched a new investment vehicle in 2021 called the Advancement Initiative focused on growth-stage investments in technology companies that demonstrate high potential for strong returns. Read more about how our work with Base10 Partners promises to boost the endowments at HBCUs here.
Investing in support of the homeless and affordable housing
As part of our focus on housing, we have helped finance much-needed upgrades to some of New York City’s homeless shelters to make a meaningful and measurable impact on homelessness in our own community here in New York.
In 2017, New York City embarked on an initiative designed to transform its homeless shelter system titled “Turning the Tide on Homelessness,” with the dual goals of reducing homelessness and improving both the quality and efficacy of its shelters. Under the initiative, the Department of Homeless Services enters long-term contracts with well-regarded operators and developers to construct or renovate buildings to use as shelters.
These “purpose-built” shelters, each containing about 100 units, will be professionally staffed and offer amenities such as common recreation and workspaces as well as bike storage and laundry rooms. The objective is to lower costs and improve services available to the homeless population, versus the city having to lease and operate buildings itself or pay higher costs to use hotels to meet capacity demands.
Of the three shelters we’ve financed, two are brand new, ground-up developments for homeless individuals in Brooklyn and Queens. The third is the rehabilitation of an existing shelter in Brooklyn.
Not only do these transactions meet return objectives for our policy owners, but they also unlock capital for additional shelters that will help those in need transition to more stable housing in a safe and dignified way.
In terms of our affordable housing initiatives, we’ve invested more than $300 million in low-income housing tax credits, providing key equity financing that is the foundation for new affordable housing construction. Additionally, we have committed $50 million each with trusted Community Development Financial Institution (CDFI) partners Enterprise Community Loan Fund and Century Housing Corporation to amplify their affordable housing lending programs and to increase the capacity of minority developers. Enabling individuals and families to stay in affordable homes gives them a chance to build savings, start a business, or send a child to college who will in turn earn an income higher than their parents – all of which creates and builds generational wealth.
Scaling over time
“By partnering with diverse asset managers, CDFIs, and other mission-driven organizations, our long-term strategy is to scale New York Life’s initial $1 billion commitment over time,” explains Malloy. “Our goal is to develop, alongside our industry-leading partners, broad solutions and investment structures that will continue to deliver both investment returns and inclusive economic outcomes linked to job growth, health and wellness, and personal and household advancement.”
Artist rendering of St. Edwards shelter in Brooklyn.
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