The New York City Investment Fund
A thumbnail sketch of the New York City Investment Fund, one of the nation's few "corporate civic investment funds," depicts a Who's Who of Wall Street and corporate CEOs on its board of directors; $10 billion in capital under management; and $3 billion invested in 47 of 1200 projects that it's reviewed in its first five years. These 47 projects helped to create 2,750 jobs in New York City.
October 2015 | by David Delaney
However notable, these facts miss what makes the Fund a remarkable effort to rejuvenate a city's economy. A richer portrait reveals a network of CEO-to-CEO relationships that give life to the Fund and support portfolio companies in numerous and unpredictable ways. This portrait illuminates the successes and challenges the Fund encounters combining a financier's commercial discipline with a social-investor's orientation to place-based and social outcomes, a rare amalgamation that gives curious shape to the Fund's project portfolio. Funded projects as diverse as Internet-based start-ups; specialty retailers; entertainment media companies; and a university consortium for biomedical and pharmaceutical clinical trials number among those of retail shopping plazas in distressed neighborhoods; a non-profit, employee-owned home health care service for disabled Medicaid recipients; and the region's first center for recycling and disposal of computer equipment. This portrait depicts the Fund's evolution from business-deal financing to strategic investment in key business sectors with growth potential in New York City. And it shows how in the past few months, the Fund has expanded significantly its ability to influence public policy to help the city's economic development.
A Fund Needs the Ability to Influence Public Policy
Funds are, by their nature, transaction-oriented. Similarly, most investment professionals understand how to do deals. Some of the most powerful business leaders in New York City-and in the world-contributed to organizing The Investment Fund. These are people who are accustomed to doing deals involving billions of dollars and thousands of jobs. Even with a $100 million fund and a great network, the transactions that the Fund performs will never, in themselves, generate an impact that makes a dent in the city's economy, or rise to the level of a "big deal" for most network members. Ultimately, sustaining the interest of the Fund's founders and investors requires turning these deals into pilots to create major public policy shifts that are catalysts for much larger public and private investment in underserved communities and new industry cluster development. To help achieve these goals, the Fund has turned to its parent organization, the New York City Partnership and Chamber of Commerce, which has the policy, advocacy and programmatic network, staff, and platform to achieve systemic change.
* * * * *
We have traced the evolution of the New York City Investment Fund from an idea developed by Henry Kravis to a set of investments in companies and economic development sector strategies. This evolution has been a fairly rapid process, with many positive developments and, perhaps, some useful lessons learned. The Fund has good "genetics"-a robust, engaged network of business leaders, strong staffing, and sufficient capital. But it is still in the early part of its existence; it is still growing, still learning. The New York City Investment Fund is very much still a work in progress.