The American South Real Estate Fund (ASREF) is a $58 million blended private equity fund investing in real estate projects in low- and moderate-income communities in the southern states of the United States. ASREF’s mandate targets the persistent effects of certain discriminatory policies and lending practices of mainstream financial institutions in the American South since the 1930s.
ASREF’s innovative blend of PRI and market-rate capital demonstrates a series of key learnings regarding the interplay between regulatory frameworks, lenders, and borrower needs, as well as the intricacies of philanthropic involvement in blended finance:
- Blended finance approaches can be strategically deployed to meet the needs of sponsors, investors, and borrowers.
- Policy, legal, and regulatory frameworks must promote the flow of the private sector into development activities.
- Philanthropic investors should more systematically adopt mandates for private sector capital mobilization when appropriate.
- Securing a prominent and experienced anchor investor can significantly improve the efficiency of the fundraising process.
