Catalyst launches first real estate opportunity zone fund

Catalyst, a double bottom-line private equity firm, has launched its inaugural real estate opportunity zone fund.

“We believe that over a 10-year opportunity zone investment horizon, our comprehensive strategy will maximize financial returns and create better outcomes for individual and families,” said Jim Sorenson, a co-founder and Catalyst managing partner. “Our fund is differentiated by our holistic approach to redevelopment that identifies and partners with best-in-class local developers, community and business leaders, government officials, and economic development leaders.”

Catalyst plans to raise $150 million for Fund I to invest in high-potential, but historically overlooked, small and mid-market U.S. opportunity zone communities with high growth potential. Catalyst is committed to leveraging Fund I to maximize both financial returns for investors and social impact for communities by investing in projects that increase access to high-quality jobs, healthcare, education, and housing opportunities for local residents. Catalyst expects to raise a second opportunity zone fund focused on investments in job-creating operating businesses in the same communities.

Catalyst is targeting high-potential markets around the United States that are uniquely positioned to benefit from opportunity zone investment. Catalyst focuses on overlooked markets where it sees economic signal, latent demand drivers, and a high degree of engagement from local government, nonprofits, philanthropy and other key community stakeholders.

“We find projects in smaller, out-of-the-way markets that are undervalued and have great potential but are off the radar of institutional capital,” said Patrick McKenna, a co-founder and Catalyst managing partner.

Catalyst is currently vetting dozens of mixed-use projects in opportunity zones around the country that are sponsored by highly aligned impact-oriented developers and that incorporate some or all of the following elements:

• Workforce affordable housing for entrepreneurs, health workers, creative class, public safety officials, educators and other backbones of the community
• Co-working, creative office, maker space and incubators or accelerators that lower barriers-to-entry and support local small businesses and entrepreneurs
• Community health clinics providing cost-saving, preventative healthcare services locally
• Space for adult skills training and high-quality educational programs for kids
• Grocery in communities where local residents lack access to affordable/healthy food options

“We’re partnering with communities across the United States to unlock economic growth and improve social, health, and educational outcomes,” noted Jeremy Keele, a co-founder and Catalyst managing partner. “Our holistic community investment approach aligns with the original purpose and intent of the opportunity zone program. We believe Catalyst could become a national model of best practices for maximizing both returns and impact in these communities.”