Community Impact Investing

From affordable housing, neighborhood revitalization, to small business development
Jan 11, 2018 9:00 AM ET
Jamie Horwitz, CCM

Community Impact Investing

By Jamie Horwitz, Chief Marketing Officer, Community Capital Management 

Community Capital Management, Inc. (CCM) is a registered investment advisor, headquartered in Weston, Florida, with offices in Boston, Massachusetts and Charlotte, North Carolina. The firm manages just over $2.4 billion, $2.1 billion of which is in the CRA Qualified Investment Fund (CRA Fund). “CRA” stands for the Community Reinvestment Act, which regulates banks within the U.S. The CRA Fund is a market-rate, fixed income fund that invests in U.S.-based community impact investments. Community impact investments focus on positive criteria for inclusion in a portfolio and can include a wide range of intentions such as affordable housing, neighborhood revitalization, and small business development.

Launched in 1999, the CRA Fund was created for banks looking for CRA investments and has grown to include individual and non-financial institutional investors interested in its community impact investment strategy. To our knowledge, it is the largest impact investment bond fund in its peer group and the largest in the U.S. The Fund offers three share classes for investors – one for banks (ticker: CRAIX), one for retail investors (ticker: CRATX), and one for institutional investors (ticker: CRANX). All three share classes are available on a variety of platforms including Fidelity, Charles Schwab, Pershing, TD and LPL.

The CRA Fund’s strategy is fossil fuel free and focuses on investing in four sectors of the bond market where our CCM team identifies, records, and tracks the environmental and social activity that each transaction supports. These sectors include single family agency mortgage-backed securities (MBS), agency commercial MBS (CMBS), taxable municipals, and asset-backed securities (ABS). These types of investments provide capital to help finance affordable homeownership, loans to start or improve small businesses, loans to rehabilitate affordable rental housing properties and healthcare facilities, and improvements to communities nationwide such as green technology, revitalization activities, rural community development, and more.

Our pioneering research process combines impact with financial analysis providing an added layer of investment transparency by detailing the use of bond proceeds. We use a quantitative and qualitative approach to understand what each bond is financing and to report on each bond’s multiple positive-based outcomes. Since 1999, we have invested over $8.1 billion in community impact initiatives nationwide.

Impact investments are categorized using seventeen “impact themes” that include: affordable health/rehab care, affordable housing, arts & culture, disaster recovery, education/childcare, enterprise development/jobs, environmental sustainability, gender lens, government supported communities, healthy communities, human empowerment, minority neighborhoods, neighborhood revitalization, rural community development, seniors/disabled, sustainable agriculture, and transit-oriented development.

Each bond in the CRA Fund is assigned one or more of these impact themes. We believe the real heart of the story lies in the qualitative research and detailed explanations of what the bonds are financing within communities nationwide.

Read more about CCM's projects - 74 West Tremont Apartments, Bronx, NY and Kivel Manor, Phoenix, AZ in the rest of Jamie's blog post -