Momentus Capital Announces Sale of $5 Million Racial Equity Bond to U.S. Bank in Support of Real Estate Developers of Color
Developers of color have historically faced significant barriers resulting from generations of structural racism and disinvestment. This investment will go toward Momentus Capital’s efforts to help developers grow their businesses.
SEPTEMBER 13, 2022 (Arlington, VA/San Diego, CA) – Momentus Capital announced today that U.S. Bank has purchased a $5 million Racial Equity Bond from Capital Impact Partners, part of the Momentus Capital family of companies. It is the first time that Capital Impact Partners has offered a bond like this; the use of funds is restricted to ensure investors’ funds go to developers of color and the work is achieving its intended racial equity impact.
This investment will help support Momentus Capital’s continued work toward helping real estate developers of color in an industry where they are starkly underrepresented to create generational wealth, construct developments that are aligned with community needs, and build more affordable housing.
“As part of our U.S. Bank Access Commitment, we’re committed to deploying $500 million in impact capital pools to support Black and person of color-led organizations or programs focused on advancing racial equity,” said Zack Boyers, chairman and CEO of U.S. Bancorp Community Development Corporation, the community investment division of the bank. “This investment with Capital Impact Partners is our first investment leveraging that capital and we look forward to continuing to work together to support Black developers.”
“We at Momentus Capital continue to look for innovative ways, such as this Racial Equity Bond, to create a continuum of financial, knowledge and social capital — transforming how the financial sector is better able to support community solutions,” said Jaret Ings, senior director of finance and treasurer for Momentus Capital. “We are grateful to U.S. Bank for recognizing how important it is to provide real estate developers of color with equitable access to financing”
Developers of color have historically faced significant barriers resulting from generations of structural racism and disinvestment.
Only 2% of real estate development companies in the United States are Black-led, and real estate firms led by people of color control only 1.5% of real estate assets under management, according to Enterprise Community Partners.
And only 5% of the Urban Land Institute’s members are African American and 9% are Latino, according to a 2020 report.Additionally, U.S. Bank structured and closed the bond with Capital Impact Partners. These types of bonds help Community Development Financial Institutions (CDFIs) raise capital to address critical social challenges.
“We’re proud to create another racial equity bond that will help deliver tangible economic benefits to developers of color and the communities they serve,” said Marcus Martin, head of environmental, social, governance for commercial products, U.S. Bank. “There is growing interest in this innovative bond structure because it helps assure investors that their funds will achieve their intended racial equity impact.”
A Continued Collaboration
This bond represents an ongoing partnership between Capital Impact Partners and U.S. Bank to address systemic issues of racial and social justice.
In 2021, Capital Impact Partners was awarded a grant through U.S. Bank Access to Capital: Collaborating to Invest in Developers of Color for its technical assistance for developers of color. That grant helped Capital Impact expand its Equitable Development Initiative to the Bay Area.
“This newest investment is another example of U.S. Bank’s continued support for our work,” said Natalie Gunn, chief financial officer for Momentus Capital. “We have a strong track record of bringing social and economic justice in disinvested communities while also delivering a strong financial performance.”
For example, in recent years U.S. Bank has supported Capital Impact Partners in a variety of ways, ranging from providing a line of credit for general purposes, including loan deployment; grants for direct support to Black businesses, offsetting financial stresses caused by COVID-19; and tax credit investments that have supported projects such as a Federally Qualified Health Center, food bank and space for other nonprofit service providers in Denton, Texas, and Joshua House Health Center, serving unhoused individuals in the section of Los Angeles known as “Skid Row.”
About Momentus Capital
Momentus Capital is transforming how capital and investments flow into communities to provide people access to the capital and opportunities they deserve.
Through our family of mission-driven organizations including Capital Impact Partners, CDC Small Business Finance, and Ventures Lending Technologies, we are working to reinvent traditional financial systems that have failed to address systemic issues of inequality, economic empowerment, and the widening racial wealth gap.
Each organization under the Momentus Capital brand will continue operating as a separate entity committed to serving its key market and clients, albeit with additional resources and product offerings.
We offer a continuum of financial, knowledge, and social capital to help local leaders build inclusive and equitable communities and create generational wealth. This includes a comprehensive package of loan products, impact investment opportunities, training and business advising programs, and technology services that advance locally-led solutions.
Leveraging 80 years of combined experience, a portfolio of nearly $3 billion, and strong community engagement, the family of companies has delivered more than $23 billion in financing, created and preserved 250,000 jobs, and served 12,000 small businesses and five million people across their history.
With headquarters in Arlington, Virginia, and San Diego, California, Momentus Capital operates nationally with a focus on larger urban areas and cities in Arizona, Michigan, Nevada, New York, Texas, and Washington, D.C.
Learn more at momentuscap.org.
About Capital Impact Partners:
Capital Impact is transforming how capital and investments flow into communities to provide people access to the capital and opportunities they deserve. We work to champion key issues of equity and social and economic justice by deploying mission-driven financing, capacity-building programs, and impact investing opportunities.
Capital Impact is now part of the Momentus Capital family of organizations, including CDC Small Business Finance and Ventures Lending Technologies. Together, we offer a continuum of financial, knowledge, and social capital to help local leaders build inclusive and equitable communities and create generational wealth. This includes a comprehensive package of loan products, impact investment opportunities, training and business advising programs, and technology services that advance locally-led solutions.
A nonprofit Community Development Financial Institution, Capital Impact has disbursed more than $2.5 billion since 1982 to create access to critical social services, grow entrepreneurs, and create quality jobs. Capital Impact’s leadership in delivering financial and social impact has resulted in the organization being rated by S&P Global and recognized by Aeris for its performance.
Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local teams in Austin, TX, Detroit, MI, New York, NY, and Oakland, CA.
Learn more at www.capitalimpact.org and momentuscap.org.
About U.S. Bank:
U.S. Bancorp, with approximately 70,000 employees and $591 billion in assets as of June 30, 2022, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. The company has been recognized for its approach to digital innovation, social responsibility, and customer service, including being named one of the 2022 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at usbank.com/about.
Momentus Capital/Capital Impact Partners