March 21, 2016
Community Capital Management Publishes Annual Impact Report
by Robert Kropp
In a webinar, Chief Impact Investment Officer David Sand emphasizes the importance the sustainable fixed income firm places on environmental and social impacts.
SocialFunds.com — The third annual Impact Report of Community Capital Management (CCM), a sustainable fixed income investment advisor headquartered in Florida, was introduced earlier this month in a webinar hosted by David Sand, the firm’s Chief Impact Investment Officer.
“We manage over $2 billion in fixed income assets, all in high credit quality US fixed income,” Sand said. “Our clients include pension funds, endowments, foundations, individuals, financial institutions, faith-based investors, and so on.”
CCM’s report provides the financial information one would expect from an annual report by an investment firm. In its 17 years of existence, “the firm has invested $6.9 billion in cumulative community development initiatives nationwide on behalf of our clients,” the report states. The sectors in which CCM primarily invests include Agency Mortgage-Backed Securities for single and multi-family mortgages; taxable municipal bonds; and Small Business Administration (SBA) loans and pools.
The firm’s CRA Qualified Investment Fund Institutional Shares (CRANX) was ranked by Morningstar as one of the top one percent of performers for 2015 in the intermediate government category of 309 funds.
CCM’s role in community rehabilitation projects is that of the “patient capital long-term investor,” the report states, which “will own a mortgage or similar investment instrument on the reincarnated property.”
But the environmental and social impacts of such investments are as important, if not more so, than financial returns for sustainable fixed-income investors, and most of CCM’s Impact Report focuses on those impacts. Because CCM focuses on fixed income, Sand noted in the webinar, the governance aspect of environmental, social, and corporate governance (ESG) doesn’t really apply. Unlike many other financial advisors, however, the environmental and social impacts of CCM’s investment strategy “is baked into our DNA,” he said.
During 2015 alone, CCM’s investments contributed to the following impacts:
1. 26,000 affordable housing rental units;
2. 1,400 home mortgages for low- and moderate-income borrowers;
3. $32 million in enterprise development and job creation;
4. $21 million in economic development;
5. $19 million in statewide home ownership and down payment assistance; and
6. $2 million in affordable healthcare and rehabilitation facilities.
Furthermore, Sand noted during the webinar, “We encourage our clients to give us an impact theme or geography to target the investments that we manage for them.”
A number of case studies included in the report highlight some of the impacts CCM’s investments have had. A project discussed by Sand during the webinar was City Market at O Street, described in the report as “a one million square foot mixed-use development in the historic Shaw neighborhood in Washington, DC.” Included in the project are 90 units of affordable housing for senior citizens.
“It was not a gentrification project,” Sand said.
In addition to case studies, the report also describes several white papers published by CCM in 2015 that address aspects of sustainable fixed-income investing. Published in March, Investing in Rural Community Development served as an announcement by the firm of a new investment initiative consisting of $100 million in bonds to finance rural community development.
“Rural communities face unique challenges, and generally face different opportunities and limitations to achieving prosperity relative to their urban and suburban counterparts,” CCM co-founder Barbara VanScoy said. “Our goal with the $100 million initiative is to channel more monies into financing community and economic development initiatives in rural and underserved communities nationwide.”
Published in September, P lace-Based Investing and the Role of the Impact Investor described a number of successful investments in which CCM contributed its patient capital role. The paper states, “There are a multitude of local, community benefits that can be achieved as a result of place-based investing such as, but not limited to: job creation, revitalization, smart growth and affordable housing.”
“We call ourselves impact investors,” Sand stated during the webinar. CCM’s annual report confirms the description, and highlights the success of the sustainable fixed-income investor’s focus on environmental and social impacts.
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