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Working together

Minnesota foundations hope for impact from pooled assets

Several foundations in Minnesota are investing in affordable housing and small-business lending in the state through a strategy created by RBC Global Asset Management (U.S.) Inc.

Based on a recommendation from the Minnesota Council of Foundations, a Minneapolis-based group representing endowments and foundations in the state, 11 foundations hired RBC Global to run an initial $17 million in RBC's Access Capital Community Investment Fund, a fixed-income fund.

The assets come from an impact investing collaboration created by the council and led by the $2.2 billion McKnight Foundation, Minneapolis, as well as the $906 million Otto Bremer Trust and $883 million Bush Foundation, both of St. Paul, Minn. Eight other foundations are in the process of funding investments in the strategy.

Susan Hammel, executive in residence for the council and a specialist in impact investing, said the strategy should see investments increase to a total of $20 million soon. “The beauty is that each member foundation acts together in this investment but acts independently in hiring the manager,” Ms. Hammel said.

The RBC fund has a total of $1 billion in assets under management. The strategy invests in customized U.S. agency guaranteed mortgage-backed securities and government-backed loans, and municipal securities that support affordable rental housing, small businesses, health care, education and job creation targeting low- and moderate-income residents and communities, according to a news release from the council.

This article originally appeared in the May 1, 2017 print issue as, "Foundations hope for impact from pooled assets".