October 9, 2017
On October 4th, the Community Foundation of New Jersey, with partner U.S. Trust, hosted an engaging conversation with four diverse stakeholders in the economic transformation underway in Newark, NJ.
Ommeed Sathe, who leads impact investments for Prudential Financial, spoke about the long-term commitment his company has made to Newark and cities like it to create diverse pathways of opportunity. Prudential’s multi-dimension investments in businesses seeking to establish themselves in cities like Newark are paying off: the historic Hahne & Co. building where CFNJ hosted this conversation is a prime example of a mixed use investment that brings retail, real estate development, housing, education and business together in collaboration. Sathe spoke about the need for partnerships, for in-depth understanding of the business models that entrepreneurs are using to build their new companies, and the important role that the public sector can play. Sathe also maintained that just as companies need investors that can take equity positions, debt for capital growth is a critical factor in a new business’ potential for success.
One example of an effective partnership is between Prudential and AeroFarms, which in 2016 opened its 70,000 square foot state-of-the-art vertical farm in a former steel mill in the Ironbound neighborhood in downtown Newark. David Rosenberg, the serial entrepreneur who founded AeroFarms, spoke about the close relationship his company enjoys with the Impact Investment team at Prudential. By sharing business plans, outlining technological needs and identifying potential barriers to growth, Rosenberg and his team have been able to work with Prudential and others to create an operating environment that employs local residents, provides products for local consumption, and reduces his company’s carbon footprint many times over. Tackling such challenges as public transportation to his plant or workforce development that embraces a diversity of employees are ones that are critical to AeroFarms’ success.
Andrea Jung’s organization, Grameen America, works with a different kind of Newark entrepreneur – low-income women who seek small infusions of capital in the form of microfinance to support the growth of their businesses. As Jung explained, the more than 175 women who have joined the Newark branch of Grameen in the last year use are managing to secure a financial foothold and begin climbing the rungs of economic advancement. Through the Grameen loans, women gain critical financial literacy skills, establish savings accounts and put away savings, and build a credit history that they can use for larger investments down the road. Newark is the 18th branch in the Grameen system, which in 10 years has made $1 billion in microfinance loans to more than 100,000 women across the US.
For Jackie VanderBrug, investing in ideas and businesses that have a social investment return is an important way that high net worth individuals can contribute to the revitalization opportunities happening in Newark and across the United States. In her role at U.S. Trust as a key investment strategist, VanderBrug has developed a number of analytical tools—including using a gender lens–to enable investors and philanthropists to evaluate and make impact investments in the public markets. One of the challenges, she argued, is finding ways for investors to participate in private equity-type opportunities with similar social impact.
The speakers responded to questions by moderator Hans Dekker as well as the audience of fundholders, clients, partners and other business participants in Newark’s renewal, showing great interest in the intersection of their respective roles. Jung noted that high net worth individuals can participate as grantmakers to new Grameen branches, or can invest in a social impact fund that returns annual dividends over a 5-7 year commitment. Sathe added that while many of investment vehicles that companies can utilize are not not currently accessible to private investors, that reality will change soon, with more ways for them to join in.