May 22, 2023 (New York, NY) – Momentus Securities has launched with the goal of driving institutional capital to America’s small businesses and nonprofits — and positioning “social impact” as a fully investable asset class for institutional investors.
Momentus Securities — a registered broker-dealer and FINRA member — seeks to disrupt the mission-driven investing space by addressing the current scale and liquidity limitations in the sector that inhibit the deployment of institutional capital. Momentus Securities intends to facilitate the deployment of $3 billion of social capital by 2026.
“This is an innovative approach. We are transforming how institutional investment capital is unlocked and channeled into high-need community investments,” said Momentus Securities President and CEO Alicia Reyes, who brings 27 years of experience in investment banking and private equity to Momentus Securities. “The lending market in the impact sector is decentralized and highly dispersed. This is a challenge for institutional investors that want to fully incorporate the ‘S of ESG’ into their mainstream strategies because of the lack of liquidity.”
“We see this as an opportunity to launch ‘social Collateralized Loan Obligations’ and, initially, intend to open warehousing lines to aggregate portfolios of loans across five key segments: affordable housing, healthcare, education, small businesses and food. Once ramped up, the portfolios will be securitized, and we will distribute the bonds as a takeout. These portfolios will offer institutional investors the opportunity to support communities and participate and invest at a scale not previously available. Lenders will achieve better terms while providing investors an improved risk return profile,” Ms. Reyes added.
Momentus Securities offers services across markets and investment banking, ranging from Structuring and Distribution in the public side to Debt Capital Markets, Advisory (including Mergers & Acquisitions, rating and balance sheet advisory) and Equity Capital Markets on the private side.
Among others, the launch of Momentus Securities is supported with grant funding to Capital Impact Partners from the F.B. Heron Foundation, Citi Foundation, the Robert Wood Johnson Foundation, and MacKenzie Scott, as well as support from The Rockefeller Foundation through a subcontracting relationship.
“We have launched Momentus Securities to support mission-driven investing for companies, financial institutions, and philanthropic organizations, which have already pledged around $11 trillion of U.S. assets toward community and economic development initiatives,” said Ellis Carr, President and CEO of Capital Impact Partners and CDC Small Business Finance, each of which is part of the Momentus Capital branded family of organizations. “These investments will support large community development financial institutions as well as smaller mission-based organizations and social enterprises, working to promote economic mobility and community health across a range of sectors from affordable housing to food, healthcare, education, and small business entrepreneurship.”
“We’re bridging the gap between the supply and demand of capital and providing mission-driven lenders access to a market that has never truly been available before,” said Kurt Chilcott, Chairman of Capital Impact Partners and CDC Small Business Finance. “We will test and scale new products that expand access to capital, and we will aggregate capital through technology and authentic community relationships.”
Quotes From Initial Supporters
“Expanding access to capital in communities doesn’t just happen by increasing financial services. It requires new, game-changing solutions like the launch of Momentus Securities,” said Brandee McHale, President of the Citi Foundation, which provided support for Momentus Securities through its Community Finance Innovation Fund. “This new vehicle has the potential to drive down costs and increase liquidity for the field so that CDFIs and community-based organizations can grow and, in turn, deepen their positive social impact in the communities they serve.”
“Economic realities require innovative financing strategies to open up capital for communities and we’re excited to see financial vehicles pursuing such strategies,” said Zoila Jennings, impact investment lead at RWJF.
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About Momentus Securities
Momentus Securities, an SEC-registered broker-dealer, MSRB-registered, and FINRA/SIPC member, offers a range of financial products and services to support its mission of connecting mainstream capital sources and impactful investment opportunities. These services include debt and equity capital raising, asset-backed and structured finance as well as corporate finance and advisory services, and will be offered across four key segments: Affordable Housing, Healthcare, Education and Small Businesses. Momentus Securities seeks to bolster the mission-driven investing space by addressing the current scale and liquidity limitations in the sector that inhibit the deployment of institutional capital.
Momentus Securities is part of the Momentus Capital branded family of organizations, which also include, among other organizations, Capital Impact Partners (a nonprofit Community Development Financial Institution, or CDFI) and CDC Small Business Finance (a leading SBA Community Advantage Small Business Lending Company, or CA SBLC).
Disclaimer
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About Momentus Capital
The Momentus Capital branded family of organizations refers to the combined operations of Capital Impact Partners and CDC Small Business Finance, as well as their affiliates, Momentus Direct Capital, and Momentus Securities (an SEC-registered broker-dealer, MSRB-registered, FINRA/SIPC member). While each organization under the Momentus Capital brand still operates as a separate entity, its clients now have access to more resources and products.
The Momentus Capital branded family of organizations is transforming how capital and investments flow into communities to provide people access to the capital and opportunities they deserve. We are working to reinvent traditional financial systems by offering a continuum of financial, knowledge, and social capital to help entrepreneurs, community-based organizations, and local leaders at every growth stage to build strong communities and create generational wealth.
This includes a comprehensive package of loan products, impact investment opportunities, training and business advising programs, and technology solutions that advance locally-led solutions.
Leveraging more than 80 years of combined experience, more than $3 billion in assets under management, and strong community engagement, the Momentus Capital branded family of organizations has delivered $24 billion in financing, created and preserved 298,000 jobs, and served 14,350 small businesses and 6 million people across our history.
With headquarters in Arlington, Virginia, and San Diego, California, Momentus Capital operates nationally with a focus on larger urban areas and cities in Arizona, California, Georgia, Michigan, Nevada, New York, Texas, and the Washington D.C. metro area.
Learn more at momentuscap.org.