New Boston Launches Urban Strategy America Fund

BOSTON-New Boston Fund Inc. has launched an initiative designed to invest in core urban markets targeted for economic redevelopment. The firm's Urban Strategy America Fund, a closed-end, commingled fund organized for institutional investors, puts investment dollars into developments targeting up and coming urban areas along the East Coast, including New England.

"The strategy is to invest in urban areas but also in areas of economic development," Kirk Sykes, president of New Boston's USA Fund tells GlobeSt.com. "Our goal is to benefit the communities of our investors by fostering opportunities to enhance the quality of life for the residents and businesses while increasing the tax base and stimulating growth."

The fund's strategy is designed to offer investors a chance to transform urban and economic development by providing positive socio-economic benefits while also achieving an attractive return. Investors in the locally based, privately held company's new offering, include the State of Connecticut Retirement Plans and Trust Funds, Massachusetts Pension Reserve Investment Management Board, Blue Cross and Blue Shield of Massachusetts, Wachovia Corp. and John Hancock Life Insurance Co. They have already committed $100 million to the $200 million equity fund, which the company promotes as a vehicle that allows investors "to do well while doing good."

According to Sykes that strategy could bring investors profits of between 12.5% to 15% over the life of the fund. A recently approved initial investment, known as Olmsted Green, will place about $140 million in USA Fund money into a project that will bring 287 units of "workforce housing" along with a healthcare facility, training center and retail space to one of the largest developable parcels in the city. That project, a joint venture between New Boston Fund and Lena Park Community Development Corp., is still awaiting city approvals before it can be developed on a parcel of Morton Street land in Boston's Mattapan neighborhood.

Sykes says that while about 60% of the fund--which holds a $300 million to $600 million portfolio--will be focused on housing, it will also invest in other ventures as well, including universities, retail, warehouses and industrial facilities from New England through Maryland. New Boston Fund opted to limit its USA Fund investments to that East Coast area because of the company's history in that market, he says.