1. Double Bottom Line Funds: Successful Private Equity Funds
Double Bottom Line Funds: Successful Private Equity Funds to Revitalize Low Income Neighborhoods
2005 MetroBusinessNet Annual Convening
Miami, Florida
February 17-18,2005
Belden Hull Daniels, President & CEO
Economic Innovation International, Inc

2. What are Double Bottom Line Initiatives and Funds?
Regional Initiatives oversee Private Equity Funds
$3 billion managed by proven fund managers
Upper quartile private equity returns attract investors
Double Bottom Line Funds
Pull growth back into the urban core
Fully redeploy inner city infrastructure
Fund mixed-use, mixed-income and job generating projects
Generate large scale job, wealth & community impacts
Two Bottom Lines
The First Bottom Line: upper quartile market returns for investors
The Second Bottom Line—The Three Es: Sustainable E1conomic Development; Social E2quity, and Sound E3nvironmental impact.

3. Double Bottom Line Initiatives & Funds have unique qualities:
Regional Initiatives link low income areas to the larger region
Low income areas only prosper by exporting to the larger region
Regions can only prosper if low income areas prosper
Large Scale makes a substantial impact—Billions!
Private Market Discipline drives the Initiatives and Funds
Double Bottom Line DNA is deeply embedded in the Funds
Successful Fund Managers profit by recognizing and addressing market failure
Initiatives measure and report success with both bottom lines

4. Double Bottom Line Funds Focus Investments in:
Mixed-use commercial, industrial & housing projects
Affordable and mixed-income housing
Urban infill and brownfield cleanup
Transit-oriented development
Job and wealth creating business ventures
Profitable investment for developers and investors
Measurable job and wealth for community residents

5. Double Bottom line Funds Are Capitalized to Succeed
Private equity produces higher returns by
capitalizing on market imperfections
Proven, incented private management
High investor returns are appropriate to risk
$3 billion invested by banks, pension funds, insurance companies, foundations, endowments and others
Community sponsors oversee most funds
Close working relationship with the public sector

6. Double Bottom Line Funds Use Private Market Discipline
Fund managers chosen in competitive process
Investors & community involved in selection
Fund managers protected by firewall & at risk
Accountability to community stakeholders
Sponsors participate in economic returns

7. Successful Fund Managers Find & Fix Market Failure:
Low Income Neighborhoods are Not Disadvantaged— They are Domestic Emerging Markets!
They have:
The nation’s only untapped labor force
Vast untapped disposable income to buy
Large tracts of underappreciated land close to the Central City
In place, and often underutilized, infrastructure.
Successful Fund Managers address these market failures for the benefit of both investors and community stakeholders
Private Equity Funds only make money when they find and fix a market failure
Community Stakeholders reap the jobs, wealth and community revitalization from success as a domestic emerging market.

8. Double Bottom Line Funds: Investors Appreciate Returns
Banks like CRA credit plus high returns
Insurance industry likes avoiding CRA plus high returns
Public Pension Funds like DBL plus high returns
Foundations like high corpus returns, not low PRI returns
Faith based investors slow to come on board
Corporations & high net worth individuals are joining

9. Double Bottom Line Funds Capitalize Strong Demand

10. Not a just a Fund; a System! Funds I II & III
Genesis LA Real Estate Funds

11. Double Bottom Line Funds have exploded across the US
Puget Sound
Portland
Coastal Maine
Boston
New York
Sacramento
Philadelphia
Bay Area
Baltimore/Washington
St. Louis
Los Angeles
Albuquerque
San Diego
Shreveport
Miami

12. Not Just a Fund; A Family of Funds!
Genesis LA Not-for-Profit
Real Estate Fund I
$85M
Real Estate Fund II
$150M
Workforce Housing Fund I
$60M
Business Equity Fund I
$30M
Shamrock
Shamrock
Fulcrum
Phoenix

13. Many Models: Genesis LA Family of Funds
Genesis LA Not-for-Profit oversees the Funds
$300 Million currently under management
$1.5 Billion in deals generated
$85 Million Genesis LA Real Estate Fund I
Managed by Shamrock, the Disney Family Fund Manager
Returns far above promised high teens
Success in first fund leads to $150M Genesis LA Fund II
$150Million Genesis LA Real Estate Fund II
Now being built because of success of Fund I
$60Million Genesis Workforce Housing Fund I
Managed by Phoenix Realty
Supports “workforce housing” in LA’s urban core
$30Million Business Equity Fund I
Invests in minority entrepreneurs in LMI neighborhoods

14. Many Models: $217Million Coastal Enterprises
$53M Coastal Enterprises, Inc.—the NFP parent owner
25-year-old broad based CDC
Over 1,000 loans and investments in coastal Maine
Deal flow: micro loans, subordinated term loans & venture capital
$25M CEI Ventures, Inc.—wholly owned for-profit mgt firm
$5.5M Coastal Ventures Fund I
$20M Coastal Ventures Fund II
Similar Subsidiary Structures for:
CDFI: $10M CEI Community Ventures Fund
NMTC: $129M CEI Capital Management

15. Many Models: Massachusetts Life Initiative
1997 Massachusetts “CRA” Insurance legislation
Community Advocates/Legis Oversee Funds
$100 Million Massachusetts Life Initiative
Totally funded by Mass Life Insurance Industry
Invests with CDCs and Housing Associations
$100M already invested; starting 2nd cycle
Based on 25 yr, $500M MCRC: 18,000 jobs, 60%LMI
Real value not $, but capacity building
$80M Massachusetts P&C Initiative

16. Many Models: American Ventures
South Florida Urban Initiative Fund
$30M first closing; $75M final closing
Focuses on Miami-Dade, Broward & Palm Beach
dense development
mixed-use, mixed-income
transit-related developments
Knight Foundation initiated process
Investors include: Citicorp, Wachovia, Knight
Albuquerque Urban Initiative Fund
Other regions in negotiation