The Solution Finance Accelerator, whose first cohort ran from 2020-2021, contributes to a vision of a vibrant social finance marketplace with efficient and effective investment capital flowing to social and environmental development at scale. The SFA aims to expand the Canadian social finance marketplace by supporting a group of impact investing intermediaries to develop and launch their funds. These organizations are disrupting the traditional means of structuring their business models, be it by leveraging technologies or applying new financial mechanisms to advance the United Nations Sustainable Development Goals. This series profiles the nine participants supported through the Accelerator.
New Market Funds
New Market Funds is a B Corp certified for-profit investment firm that is 51% owned by a registered charity and 49% owned by its team. As a specialized impact fund platform and manager, New Market Funds takes an integrated approach to delivering market-competitive financial performance with long-term community benefit. NMF has over 70 investors across its four impact funds, consisting largely of community and private foundations, family offices, institutions and individuals.
“It remains a challenge in Canada for investors to align their investments with their values and support the social finance sector at scale. Government investment can catalyze capital into social impact by de-risking private sector involvement in impact investing. It is imperative that government capital be both additive and supportive to the social finance ecosystem that already exists in Canada.”
–Garth Davis, Managing Partner
New Market Funds (NMF) currently manages over $65 million of capital through its own proprietary funds and as a third-party fund manager, with practices in affordable housing and community lending. It is currently developing, investing in, and lending to over 3,000 units of affordable housing and has also made loans to over 60 community organizations. NMF has identified gaps in the market for non-profits, charities and co-operatives that need growth capital to better serve their communities, and equity and development expertise to create more affordable housing. NMF supports housing projects that are affordable, on average, at or below 80% of a region’s median income and supports community organizations creating positive impacts across a range of sectors.
Despite an increase in investment from federal and provincial governments, the demand for affordable housing is increasing. NMF’s newest fund focusing on new affordable housing and rental for community organizations is structured in a way that is additive to existing government programs, but Garth Davis cautions, “we need to demonstrate to private investors that their capital can be used to serve their communities while also generating market-rate risk-adjusted returns.”
Learn more about New Market Funds.