It is our pleasure to report to you on the third year of operations for the Living Cities Catalyst Fund. Since the last annual report, the Fund grew 80 percent, from $21.25 million to $38.3 million. Total loan commitments more than doubled, rising from $8.65 million to $19.35 million. In recognition of our work and our engagement with the social impact investment field, we are also delighted to report that the Catalyst Fund was recently selected for the 2011 ImpactAssets 50–a list of leading private debt and equity fund managers that deliver social and environmental value in addition to financial returns.
Other key developments included:
Creation of three separate pools: In April 2011, we divided the Catalyst Fund into A, B, and C pools to reflect the differing maturities and programmatic uses of the funds.
New Investments: This year, we invested $3 million in the path-breaking Bay Area Transit-Oriented Affordable Housing Fund, the first of what we expect will be a series of loans to promote equitable transit-oriented development. We also made our first three loans to financial intermediaries participating in Living Cities' signature Integration Initiative. We expect to close three more loans for this initiative before the end of the calendar year.
Repayments: Two of our loans have been repaid early as a result of the success of the programs we supported. In June 2011, our loan to Opportunity Housing Cleveland for foreclosure mitigation in six strategic neighborhoods in Cleveland repaid early due to the strength of the program in selling its rehabilitated, formerly foreclosed homes. In August 2011, our loan to 5716 Lender LLC for the rehabilitation of a health and wellness facility repaid early when the project, which is now open and serving clients, received a coveted Capital Magnet Fund award.
Continuous Improvement: In an effort to garner lessons learned and reflect on how we might improve, in March 2011 we completed a staff-led evaluation of the first two years of the Catalyst Fund’s operations.This review emphasized the strategic role of the Catalyst Fund in achieving the objectives of Living Cities as a whole. We have also continued to strengthen our internal policies and procedures, amending our risk rating and loan loss allocation process to ensure that we are accounting conservatively for the Fund’s portfolio.
Through the Catalyst Fund, Living Cities has been demonstrating how grants and loans can be combined to achieve targets too large for grants alone. Since inception, our total cumulative lending of $19.35 million has sparked initiatives whose total funding now exceeds $228 million from numerous public, private, and philanthropic partners.