August 13, 2020
The concept of social impact investing wasn’t on the map yet in 1998, when Bobby Turner launched the Canyon Johnson Urban Fund in partnership with Magic Johnson. Turner, who would later found Turner Impact Capital, recalled on the latest Walker & Dunlop webcast that he and Johnson disagreed about how long fundraising would require.
Turner projected a six-month timeframe. Johnson anticipated a more arduous uphill climb and predicted it would take two years. In the end, Turner said on Wednesday’s webcast, both men were right: the fund closed two years and six months later.
These days, said Turner, a one-time protégé of Michael Milken, impact investing is a fashionable topic of conversation—and widely misunderstood. One misconception around the concept of investing in social justice is that it’s incompatible with achieving yields.
“I’m in a unique position to refute that,” he told Walker & Dunlop CEO Willy Walker.
Social impact investing, Turner said, is “a force for good.” For investors who approach it properly, it’s also a way of realizing a profit.
“Investing in hope doesn’t sacrifice yield, but does require a special skill set,” said Turner. That skill set revolves in part around overcoming what Johnson has referred to as ”arrogance” and “distrust”: arrogance on the part of institutions that come into urban neighborhoods, and distrust on the part of residents who question the investors’ intentions.
He said that government in the U.S. has largely failed to address three essential areas: education, healthcare and housing, and each of these has arguably reached a state of crisis. “Daunting challenges create generational investment opportunities,” Turner said.
A sweet spot for Turner Impact Capital is affordable housing—not low-income rentals, but workforce product for people who earn too much to qualify for subsidized apartments yet not enough to buy a house. One of the keys to both addressing social justice issues and realizing yields is giving workforce renters housing stock they’ll want to stay in.
“The biggest expense in workforce housing is turnover,” said Turner.
Having partnered with Johnson early in his days of social impact investing, Turner more recently has worked with another NBA superstar. Chris Paul, who joined Turner Impact Capital as an investor and ambassador in 2017, told the webcast audience that on their first meeting, he and Turner had a great deal in common, including a desire to see change.
It’s why Paul, Carmelo Anthony and Dwayne Wade teamed up last month to launch the Social Change Fund, which aims to address public safety, criminal justice reform and social inequalities in the Black community. “It’s not about any one of us individually,” Paul said on Wednesday’s webcast. “All of us have a common goal.”
On-demand replays of the August 12 webcast are available by clicking here.
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