By Rachel Reilly
On October 29, the Economic Innovation Group (EIG) hosted a webinar with guest speakers Jeremy Keele from Catalyst Opportunity Funds and Reid Thomas from NES Financial to discuss methods for identifying and measuring the impact of Opportunity Zones (OZs) investments. During the webinar, speakers provided an overview of proprietary impact frameworks, investment strategies, and evaluation tools currently used to provide fund managers and investors unique insights into their impact in OZs.
View presentation slides, a recording of the webinar, and EIG’s key takeaways for more information.
Key Takeaways
- Opportunity Zones investments can qualify as impact investments when a fund managers’ investment strategy is grounded in addressing a social and/or environmental issue while generating a financial return.
- Opportunity Fund managers are including reporting requirements in term sheets, as well as using proprietary investment screens and frameworks as well as third-party evaluation and monitoring services to measure the impact of their investments.
- Catalyst Opportunity Funds developed the Catalyst Impact Scorecard to assess new investment opportunities on their potential to deliver community benefits across a range of impact categories, including: community engagement, sustainability, and housing affordability/ displacement.
- NES Financial incorporated an impact evaluation and monitoring tool as part of its Fund Administration technology platform for Opportunity Fund managers. By partnering with Howard W. Buffett and Global Impact LLC to integrate their Impact Rate of Return® methodology in its services to fund managers, NES Financial has lowered the barrier to impact evaluation and monitoring and increased transparency for investors.
- An increasing number of Opportunity Zone investors and fund managers are centering impact in their investment thesis and strategy, according to Reid Thomas. Jeremy Keele noted that there is sizable opportunity for Opportunity Fund managers in the impact investing market segment because investors and asset managers are demanding impact-oriented investment products.
- With continued bipartisan support for the enactment of a federal reporting framework, fund managers can get ahead of the curve by tracking impact metrics today. According to Jeremy Keele, early adopters will have a competitive advantage if a reporting framework is mandated in the future.
EIG’s OZ Webinar Series:
This webinar is the seventeenth in a series hosted by EIG to provide Opportunity Zones strategies and insights from around the country. Topics include an introduction to Opportunity Zones, an analysis of the final regulations, emerging best practices in heartland, rural, tribal and Main Street areas, and examples of OZ activity in operating businesses, in affordable housing, and from local anchor institutions.
Rachel Reilly is the Director of Impact Strategy of Economic Innovation Group.
