IFF’s Investor Consortium had its biggest year ever in 2017, raising over $55 million in long-term capital from banks and impact investors to support IFF’s lending to nonprofits and the communities they serve. Through the regular sale of notes backed by a cross section of IFF’s high-impact loans to health and human service providers, quality schools, and grocery stores, the Investor Consortium provides investors with a simple and secure means of owning a diverse portfolio of community development loans from across the Midwest.
“Hitting the $50 million mark last year was a critical milestone for us. Our new strategic plan calls for us to raise that much annually over the next five years, and our performance in 2017 puts us ahead of schedule,” said Matthew Roth, IFF’s President of Core Business Solutions. “Meeting these goals is essential to meeting the need in the nonprofit community for our unique loan product — non-appraisal based, long-term, and affordable. Greater investment in our Investor Consortium enables us to meet that need and achieve our loan disbursement targets of $100 million per year for the next five years.”
Launched in 2004 with long-time bank partners BMO Harris, MB Financial, and Northern Trust, the Investor Consortium now includes 46 financial institutions and the Mission Investment Fund, a ministry of the Evangelical Lutheran Church in America. Over the past two years, it has added bank investors from throughout the region, including four Missouri-based banks – Midwest Bank Centre, Reliance Bank, Scottrade, and Stifel Bank & Trust – and Fifth Third, headquartered in Ohio.
“Nearly 60 percent of our loan portfolio is now comprised of loans from the broader Midwest, not just our home state of Illinois – and that’s where are future loan growth is,” added Roth. “Our Investor Consortium continues to finance loans to high-impact nonprofits while generating consistent returns to our investors.”
Last year, IFF and Northern Trust executed an innovative, single-bank note sale focused on subordinated debt and loans for leasehold improvements. These flexible loans are typically more difficult for nonprofits to access, but can be essential for nonprofits to generate high-impact projects. Working together, IFF and Northern Trust solved for these issues and increased IFF’s ability to provide even more of these loans to nonprofits.
Over the past 14 years, IFF’s Investor Consortium has raised $287 million in private capital without any loss to investors. It provides about 40 percent of IFF’s debt capital.