Economic Innovation International, Inc. 








Market-rate Community Equity Funds

Double Bottom Line, market-rate community equity funds are designed to attract large-scale capital managed by proven fund managers  into low income neighborhoods.  Community sponsors structure the funds to provide investors with market returns and community stakeholders with community revitalization and measurable job and wealth creation.   These community equity funds invest in smart growth in walkable or transit-oriented inner city neighborhoods with underutilized workforces, as well as industrial and public infrastructure; address poverty, build mixed-income and mixed-use developments; grow local businesses, and clean up contaminated sites with market-based solutions.  To date, these double bottom line equity funds now have more than $2.5 billion under management.  Financial returns to private equity investors have equaled or exceeded risk-adjusted market rates of return of "plain vanilla" funds of the same vintage.   Following is a description of the paradigm fund designed by Economic Innovation and a list of the beta funds created by the firm.

The Alpha Paradigm Fund:  The Bay Area Family of Funds (1999-2004)

bulletThe $180 million Bay Area Family of Funds is an initiative, a family of funds, and three individual funds.  Together, they are the result of a very successful collaboration of Sustainable Systems and Economic Innovation.  Sustainable Systems is the lead Initiative Builder; Economic Innovation is the lead Fund Builder; both firms have collaborated together on all aspects of the effort. 
bullet Sponsored by the Bay Area Council (the CEO-led regional public policy organization)  and community stakeholders, to leverage $1 billion targeted to the 52 neighborhoods in the Bay Area with high levels of poverty.  These paradigm funds create powerful private sector and community stakeholder leadership in a self-sufficient not-for-profit sponsor to ensure that the three market-rate private equity funds with world class fund managers achieve both their internal market-rate of return for investors and the social equity and environmental returns expected of community stakeholders. 
bullet The $66 million Bay Area Smart Growth Fund, managed by Pacific Coast Capital Partners (PCCP), invests in mixed-income housing and in mixed-use commercial and industrial real estate development to recreate vital inner city neighborhoods.  The Fund, which had its final closing on 12/31/02, is now more than 50% invested in an array of community revitalization projects.  The Fund is on track to produce the market returns (net 15-18%) expected by investors, and the job, wealth and environmental returns expected by community sponsors.
bulletThe $75 million Bay Area Equity Fund, managed by JP Morgan H&Q, invests in technology, health, specialty food and life style companies at the moment of inflection when firms go from early stage to take off.  An alpha paradigm “doble bottom line” system developed by Sustainable Systems assists invested firms with local hiring, neighborhood wealth creation, environmental and workplace benefits.  The Fund has had its first close, expects its final close to be at $75 million and is now investing in its first deals.
bullet The $40 million California Environmental Redevelopment Fund (CERF), invests in brownfield cleanup and expects to achieve appropriate returns in the high single or low double digits.

Similar Beta Funds

bulletAmerican Ventures for South Florida (2004)
bulletFulcrum Growth Capital Fund (2002)
bulletGenesis LA Family of Funds (1999)
bulletGenesis LA Real Estate Fund (1999)
bulletGenesis Workforce Housing Fund (2004)   
bulletThe Massachusetts Life Initiative (1998)
bulletThe Massachusetts Property and Casualty Initiative, LLC (1998)
bullet The Nehemiah Sacramento Valley Fund (2002)
bullet The San Diego Capital Collaborative (2003)
bullet The Portland Oregon Family of Funds (2002)
bullet The Ulster Community Investment Trust of Northern Ireland (1998)