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View Economic Innovation International Presentation

  1. 1. Prudent Investment in Urban Revitalization Belden Hull Daniels, CEO Economic Innovation International, Inc Deborah La Franchi, CEO Strategic Development Solutions Pension Funds & Urban Revitalization Baltimore, MD June 7, 2006
  2. 2. Double Bottom Line (DBL) Private Equity Funds <ul><li>1 st Bottom line: Superior Risk-Adjusted Market Returns </li></ul><ul><li>2 nd Bottom Line: Measurable Urban Revitalization </li></ul><ul><ul><li>Rapidly growing $6.5 billion industry: “doing well & doing good” </li></ul></ul><ul><ul><li>Targets investment in low-income communities </li></ul></ul><ul><ul><li>Managed by proven private equity fund managers </li></ul></ul><ul><ul><li>Creates superior risk-adjusted market returns for investors </li></ul></ul><ul><ul><li>Creates jobs and economic opportunity </li></ul></ul><ul><ul><li>Provides flexible, responsive, value-added capital </li></ul></ul>
  3. 3. Market Discipline; Accountability <ul><li>Private-sector discipline is central </li></ul><ul><li>Risk-adjusted market rate returns (mid- to high-teens) </li></ul><ul><li>Fund Sponsor sets the second bottom line goals </li></ul><ul><li>Fund Managers chosen in national competitive process </li></ul><ul><li>Fund Sponsor makes Fund Manager selection </li></ul><ul><li>Investors must approve Fund Manager </li></ul><ul><li>Fund Managers protected by firewall & at risk </li></ul><ul><li>Accountability to Fund Sponsor & community stakeholders </li></ul><ul><li>Fund Sponsor participates in financial returns </li></ul>
  4. 4. Repeat Institutional Investors <ul><li>Commercial Banks: B of A, Chase, Citibank, Union, USBank, Wachovia, WaMu, Wells and others </li></ul><ul><li>Insurance Companies: AAA, Axa, Hancock, Liberty, Mass Mutual, Mercury, Met Life, NY Life, Northwestern, Pacific Life, PMI, Prudential and others </li></ul><ul><li>Foundations : California Community; Annie E Casey, Danforth, Ford, Jacobs, Heron, Knight, MacArthur, McCune, McDonnell, Sand Hill and others </li></ul><ul><li>Public Pension Funds: CalPERS, CalSTRS, Contra Costa County, Connecticut, Illinois, LACERA, LACERS, MassPRIM, NYCERS, NY Common and others </li></ul><ul><li>Union Pension Funds: AFL-CIO Housing & Building Trusts, SEIU and others </li></ul><ul><li>University Endowments: Washington University and others </li></ul><ul><li>High-Net-Worth Persons: Bay Area, Northwest Louisiana and others </li></ul>
  5. 5. Proven Fund Managers <ul><li>Access Capital </li></ul><ul><li>Boston Capital </li></ul><ul><li>Canyon/Johnson </li></ul><ul><li>Cityscape Capital </li></ul><ul><li>Community Preservation Corp. </li></ul><ul><li>Equibase Capital Group </li></ul><ul><li>Enterprise Community Investment </li></ul><ul><li>Fidelity Partners </li></ul><ul><li>Hanover Financial </li></ul><ul><li>Hunter Chase </li></ul><ul><li>Ironwood Equity Fund </li></ul><ul><li>Kennedy Wilson </li></ul><ul><li>Landmark Equity </li></ul><ul><li>MacFarlane Partners </li></ul><ul><li>Massachusetts Capital </li></ul><ul><li>Pacific Coast Capital Partners </li></ul><ul><li>Phoenix Realty </li></ul><ul><li>The Reinvestment Fund </li></ul><ul><li>Shamrock Holdings </li></ul><ul><li>Urban America </li></ul>
  6. 6. III. Case Study: Genesis Family of Funds $450 million capital $1.5 billion deals in LMI areas 100% Self-sufficient not-for-profit Continues to create Funds Works with small – medium sized developers Genesis LA Not-for-Profit 8 staff & Board of Directors Genesis Real Estate Fund I $85 Million Mgr: Shamrock 2000 Genesis Real Estate Fund II $102 Million Mgr: Shamrock 2005 Genesis Workforce Housing Fund I $103 Million Mgr: Phoenix Realty Group 2004 Genesis Growth Fund I $30 Million Mgr: Fulcrum Capital 2003 Genesis Community Investment Fund $1 Million Mgr: Genesis LA 2000 Genesis NMTC Fund $120 Million Mgr: Genesis LA 2005
  7. 7. Case Study: Genesis Workforce Housing Fund I Managed by: Phoenix Realty Group <ul><li>For-Sale Housing: Single Family Detached, Townhouses and Condo </li></ul><ul><li>S. California’s Underserved Communities (LMI) </li></ul><ul><li>$102 million: Financing for Real Estate Development </li></ul><ul><li>Investment of $2 to $20 million </li></ul><ul><li>Fund to Provide Institutional Capital to Local Developers </li></ul><ul><li>Income of Buyers: 80% - 150% AMI, flexible to 200% AMI </li></ul><ul><li>Nurses, Teachers, Firefighters, Police, Office Workers </li></ul>
  8. 8. Case Study: Genesis Workforce Housing Fund I Avenue 26 Condominiums <ul><li>City of Los Angeles, Lincoln Heights </li></ul><ul><li>New construction of old factory site </li></ul><ul><li>Adjacent to Gold Line Metro station </li></ul><ul><li>Not-for-profit Developer </li></ul><ul><li>165 for-sale residential units </li></ul><ul><li>Child care center </li></ul><ul><li>Community arts center </li></ul><ul><li>Retail/office component </li></ul><ul><li>Senior affordable and tax-credit units to be built on adjacent site </li></ul>
  9. 9. Case Study: Bay Area 2nd Bottom Line <ul><li>Soon: Four funds, $300 million capital, $1 billion in deals </li></ul><ul><li>First Fund: $66 million Bay Area Smart Growth Fund I </li></ul><ul><li>First 3 Years: $51 million invested in 10 projects: </li></ul><ul><ul><li>100% of projects are smart growth & “Three E ” </li></ul></ul><ul><ul><li>1121 permanent & construction jobs created & retained </li></ul></ul><ul><ul><li>633 units of affordable for-sale homes developed </li></ul></ul><ul><ul><li>1.2 million sq. ft. of commercial space developed </li></ul></ul><ul><ul><li>1.6 million sq. ft. of affordable housing developed </li></ul></ul>
  10. 10. IV. Creating a Maryland Regional Workforce Housing Fund I <ul><li>$60 - $90 Million Maryland Fund generates $$180-270 Million in deals </li></ul><ul><li>100% Smart and Sustainable Growth projects </li></ul><ul><li>Preservation and conservation of open and recreational space </li></ul><ul><li>Revitalization of downtowns with mixed-income and mixed-use projects </li></ul><ul><li>Family housing for firemen, school teachers, policemen, nurses etc. </li></ul><ul><li>Transit-oriented development for livable & walkable communities. </li></ul><ul><li>Maryland Enterprise Fund Sponsor oversees Fund. </li></ul><ul><li>Enterprise Community Investment, Inc. Fund Manager brings track record. </li></ul><ul><li>National pool of repeat institutional investors have high interest </li></ul><ul><li>Now More Across Country: New England Workforce Housing Fund I </li></ul>
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