Type: Aligned Investments
Topic: Buildings & Housing
Status: Current
This RBC Global Asset Management fund buys local bonds, such as for the Midtown Exchange, a pivotal neighborhood revitalization project in Minneapolis. The redevelopment’s Midtown Global Market is home to minority- and women-owned businesses, and 81% of the housing units in the complex are for low-income tenants.
Investment
$10 million; originated March 2017
Rationale
This fixed income fund purchases bonds that support affordable housing and community development, and service low- and moderate-income individuals and communities. While generating national, diversified fixed income returns for McKnight, the fund uses our investment dollars to purchase Minnesota bonds. We joined the Minnesota Council on Foundations in this first-of-its-kind “Minnesota sleeve” to encourage foundations, endowments, and family offices to participate in local impact investing.
Benchmark
Bloomberg Barclays US Aggregate and US Securitized Bond Indexes
Returns
Underperforming benchmark, track record too short for conclusive assessment, portfolio of $10 million as of Q4 2017
Lessons Learned
The McKnight Foundation endowment provides opportunities–beyond grantmaking–to support housing and business development nonprofits. This investment may purchase bonds originated by our grantees. That helps organizations lighten their balance sheets, borrow more money, and take on new projects.
Photo Credits: Tony Webster, Flickr Creative Commons
Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.
Last updated 3/2020