February 2, 2010
Fifth Third, Key are First to Invest
NDC Corporate Equity Fund IX launched in March, and in the third quarter, received its first commitment, from Fifth Third Bank for $8.0 million, announced Ann Vogt, CEF managing director. A second investor, Key Bank, has committed to $3.0 million at the start of the fourth quarter.
CEF IX’s goal is to raise $60 million by the end of 2010. By comparison, NDC Corporate Equity Fund VIII raised $39 million.
Presently completing its 15th year, NDC’s Corporate Equity Fund has invested in over 150 developments, comprising 7,000 housing units in twenty-five states and Puerto Rico. Its development portfolio includes a full-range of housing types, from family and senior citizen to supportive housing, assisted living and mixed income, found in large cities, small towns, and rural locales. The average project investment is about $2.5 million to $3.0 million.
Vogt says she is encouraged by the Fifth Third and Key responses in the face of the current national financial environment. Historically, NDC CEF has had from 4 to 8 investors in its fund, Vogt explains. But the list of potential investors has shrunk, due to bank mergers and takeovers and the demise of Freddie Mac and Fannie Mae, which in past years have accounted for as much as 30% of NDC CEF’s fund.
In addition to the commitments received from Fifth Third and Key, NDC CEF is in conversation with four other banks about investment. NDC CEF will also pursue investment from non-bank investors, such as insurance companies, and will encourage already committed investors to increase their investments.
NDC’s Corporate Equity Fund (CEF) was established in 1995 as a source of equity for low-income housing Federal Low Income Housing Tax Credits (LIHTC). NDC’s fund differs from other LIHTC funds because we work with local housing sponsors very early in a project, guiding the financial structuring and securing additional public and private sector funds. Thus, a community gets the housing it needs, and also newly-skilled local housing organizations.