Using capital as a forcing mechanism for social change has been a commitment of Living Cities since its origination, and the Catalyst Family of Funds are impact investing vehicles that have helped us turn this long-lasting commitment into reality for the past 10 years. That’s why we are thrilled to announce that the Catalyst Fund and the Blended Catalyst Fund have been included in the ImpactAssets 50 among an impressive set of peers in this vibrant and growing field.
Through our impact investments, we aim to close racial wealth gaps by supporting the creation of income and wealth for people of color in US cities. We are doing so by driving more capital to entrepreneurs of color. More specifically, we are changing who the decision-makers are, to influence who gets access to capital; we are testing alternative methods of underwriting by investing in organizations that are changing how risk is assessed; and we are investing in innovative fund models, to better serve the needs of founders of color in American cities.
The Catalyst Family of Funds
The Catalyst Fund and Blended Catalyst Fund are structured debt funds that advance Living Cities' programmatic initiatives. Through the Catalyst Family of Funds, we have deployed approximately $57 million and our 29 investments have leveraged over $1 billion in additional financing. Our second fund, the Blended Catalyst Fund (BCF), is in its deployment period and is actively seeking new investment opportunities.
Below are two examples of recent transactions.
- Propeller Social Venture Fund: The BCF made a $500,000 loan to the Propeller Social Venture Fund. This fund lends to small and growing businesses, primarily owned by entrepreneurs of color, in New Orleans. The loans are coupled with technical assistance. Ultimately, through the technical assistance and growth capital provided by the Social Venture Fund, Propeller hopes to prepare entrepreneurs and emerging businesses to graduate into the formal banking system.
- NewCorp: The Catalyst Fund made a $1.3 million loan to NewCorp, a small business lender in New Orleans. NewCorp provides working capital to small and growing businesses who act as contractors for city-funded infrastructure projects. These are socially and economically disadvantaged businesses who have demonstrated the technical skill to fulfill city-funded projects but who cannot easily access debt. To date, NewCorp has made multiple loans to small and growing businesses and they have supported the creation/ preservation 100+ jobs.
We are especially honored to be part of such extraordinary group of leaders in the impact investing field this year, as we continue to refine our impact strategy towards closing the racial income and wealth gaps in U.S cities. We are certain that we will continue to learn from their investing experience and commitment social impact.