Giving back to their communities has always been a challenge for pro athletes who get rich quick, because they tend to lose the money even more quickly. But even those who manage to build a substantial amount of wealth have a hard time using it charitably in a way that truly has a long-term impact.
Some celebrity athletes are turning to “impact investing,” a growing niche of do-gooder strategies that aim to put money toward charitable causes but that would otherwise lack support. Fund managers, of course, also aim to generate income in the process.
The Turner Multifamily Impact Fund, a private-equity style vehicle focused on preserving affordable housing, has lately drawn financial support from NBA All Star Chris Paul.
He joins former World No. 1 tennis player Andre Agassi and Basketball Hall of Famer Magic Johnson, who have invested in other funds and projects run by the parent company, Turner Impact Capital and its founder, Bobby Turner. Their contributions work with dollars from hedge fund billionaire Bill Ackman, the Rockefeller Brothers Fund and actress Eva Longoria.
There were over 400 impact investing funds and products, with $31 billion in committed money, in 2015, the latest year for which data is available from Global Impact.
Run by former hedge-fund manager Bobby Turner, the Turner Multifamily Impact Fund launched in 2015 and raised $264 million in capital. It has so far acquired nine garden-style apartment complexes on the outskirts of cities like Dallas, Austin and Las Vegas, according to the fund’s website.
“We’re trying to give housing to people who make too much money for subsidized housing but do not make enough for luxury rentals or home ownership,” Turner told Reuters.
A benchmark generated by Global Impact Investing Network shows impact funds generated 5.58 percent returns over 15 years ending last June. The benchmark underperformed stock and bond market indexes across all time frames it measures.
But people involved in the Turner fund said they’re less worried about financial returns than tackling an affordable housing shortage in big cities.
“In order to really impact change,” Paul said, “it costs.”