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IMPACT Community Capital’s Michael Lohmeier Outlines the “Acyclical” Attributes of Affordable Housing in P&I Column
IMPACT’s CIO highlights how affordable housing debt can be an additive asset class for investors, whether looking through an investment or impact lens.
Within fixed income, many investors overlook the benefits of affordable housing debt as an uncorrelated credit exposure that can provide immediate current income and stable cash flows, with returns generally comparable to investment-grade bonds, albeit with historically less credit risk*.
In an op/ed published in Pensions & Investments, IMPACT Community Capital’s Chief Investment Officer, Michael Lohmeier, recently outlined how affordable housing debt can provide asset owners with an “acyclical” fixed income exposure. The article addressed the prevailing misconceptions around affordable housing. It also detailed both the market opportunity, characterized by a pronounced supply/demand imbalance, and the inefficiencies underpinning the investment opportunity, in which market expertise, networks, and deep experience create a distinct investment edge.
“Affordable housing debt provides low-volatility, low-correlation, long-duration exposure with predictable and consistent performance across economic environments,” Lohmeier wrote. “The payoff, beyond an investment thesis that helps address an insatiable demand for affordable housing, is an acyclical alternative within fixed income….”
* Past performance is not indicative of future results.
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IMPACT Community Capital was founded in 1998 by leading U.S. insurers for the sole purpose of providing institutional-quality, purpose-driven investments to institutional investors. IMPACT has originated $2 billion in impact investments since inception and continues to seek investment opportunities that provide stable income, competitive returns and positive impact to our communities.Return to blog