Group seeks to increase investment in 'under-capitlized' areas

A new group is spearheading investment in Philadelphia’s under-capitalized neighborhoods.

The Collective Investment Group, chaired by Steven Sanders, is seeking to cultivate a pipeline of Black real estate developers. The founder and convenor of the group is Sandra Dungee Glenn (pictured).

The collective was formed when a group of real estate developers highlighted the significant need for capital.

“We said that if we can pull together all of the projects that those developers had, we could reduce the risk in the marketplace, offer an opportunity set for investors to not only receive a market rate return on the investment and at the same time do good by a social matrix that we would hit,” Sanders said during a forum highlighting the importance of investing in Black- and brown-owned businesses. “So, we developed two companies around solving this issue.”

He noted that they’ve brought the developers together as a collective for a combined total of $350 million in projects.

Sanders noted that an investment team has been established to underwrite and asset manage those projects and develop those projects.

“We’ve created a collective network to develop a proprietary set of social metrics that we can look at going into the project, while we’re in the project to make sure that we have positive impact on neighborhoods inside of Philadelphia,” said Sanders, who is also the chairman of Beltraith Capital.

The collective is raising $100 million to help its first cohort of seven real estate developers fund their respective projects.

Sanders joined other business leaders during the forum held by the Chamber of Commerce for Greater Philadelphia.

Kenneth Anderson, the chamber’s vice president of civic affairs, discussed the disparities in business ownership. He cited The Pew Charitable Trusts’ annual “State of the City” report that indicated that only 2.5% of the businesses in the Philadelphia region were Black owned.

He addressed the chamber’s efforts to support Black- and brown-owned businesses. The organization is part of the Greater Philadelphia Financial Services Leadership Coalition.

“This effort will not only increase access to capital for minority-owned businesses, but also offer technical support as well as scale capacity for local community development institutions,” he said.

Anderson said the chamber and its members have also made a commitment to increasing opportunities for small Black- and brown-owned businesses by partnering with buyers to establish procurement goals and strategies through its Diverse Procurement Collaborative.

Anderson also highlighted the organization’s CEO Access Network, where C-suite chamber members are matched with CEOs of smaller companies to promote economic growth through relationship building and sharing resources.

Schnearia Ashley, senior vice president and community development, manager at Truist Financial, a bank holding company, addressed how the financial institution stepped up to support small businesses financially impacted by the pandemic.

“We had four funding pillars and I think that as a financial institution we saw that there was a huge number of disadvantaged businesses that were Black and brown so we’re changing our funding pillars for 2022,” she explained. “One of the pillars is going to be strengthening small businesses where we are making a priority to support diverse, women-owned small businesses and our goal is to really give grants to the organizations that are increasing access to capital, that have mentorship programs, that have the majority of the populations serving the communities that look like us.”

James Burnett, vice president of VestedIn, discussed how community development financial institutions (CDFIs), helped assist businesses during the pandemic. He said 17 CDFIs from across the state raised $250 million in state funding to provide grants to almost 10,000 businesses.

“The interesting thing about that is in our application process, we actually received 60,000 applications for a $1 billion worth of support,” Burnett said.

“I think what’s really important is what we only funded about 11,000 of those applications and so there’s a huge need that is still here.”

Chuck Stefanosky, director of Strategic Sourcing and Procurement at Independence Blue Cross, spoke about the company’s diversity program.

“The goal of the program from the beginning up until today is to match the diversity of our workforce and our supplier base to the communities that we serve,” said Stefanosky, who leads the company’s supplier diversity efforts.

“When we looked at making more of an investment in Black and brown businesses it was pretty easy for us to pivot because we have that C-level support. It really is around using that influencer power to drive change, to drive increased spending with diverse businesses.”

The forum was moderated by Anne Nevins, president of PIDC, a local economic development corporation. She said PIDC has disbursed nearly $70 million to more than 5,000 small businesses through various grant programs during the funding.

“We’ve also made some very important shifts in our strategies outside of pandemic relief, including to focus in on wealth building, particularly for businesses Black, indigenous and people of color-owned businesses and those who are located across Philadelphia’s low income communities,” Nevins said.

“This is part of our core strategic commitment to deploying PIDC’s resources in ways that directly address racial inequities and poverty in Philadelphia,” she said.

From The Philadelphia Tribune