IMPACTASSETS 50™

An Annual Showcase of Impact Investment Fund Managers

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An Annual Showcase of Impact Investment Fund Managers

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ImpactAssets 50: A Global Landscape of Impact Investment Fund Managers
The ImpactAssets 50 (IA 50) is the first open-source, publicly published database of experienced private debt and equity impact investment fund managers.
https://www.impactassets.org/impactassets-50

ImpactAssets 50

An Annual Showcase of Impact Investment Fund Managers

IA 50 2023 PROFILE

Blackstar Stability Investment
Manager LLC

Total Assets Under Management: $25 – 49M
Asset Class: Private Debt - Absolute Return / Notes, Real Estate, Private Equity
Primary UN Sustainable Development Goal: 11 – Sustainable Cities & Communities
Affordable Housing & Community Development
Demographic-based impact
Racial equity and justice

Firm Overview

Category: Private Debt - Other

Blackstar is a minority-owned and led real estate investment firm, focused on high-impact single-family housing strategies, based in Washington, DC. The principals’ experience over the past three decades includes deep institutional investment, public policymaking and innovative finance leadership. Restructuring and revitalizing distressed debt products in order to stabilize families impacted by adverse market conditions or individual hardship represents the expertise of the Firm's management team. Blackstar has crafted, tested and proven a double-bottom line investment approach that delivers strong returns and supports homeownership in low-income communities.

Firm Headquarters: US & Canada
Years of Operation: Less than 3 years
Total Assets Under Management:
$25 – 49M
Total Number of Investors: Between 5 – 25
% of Capital from Top 3 Investors: 50% – 99%
Investment Thesis:

Socially responsible investing to expand equitable ownership of affordable single-family homes, by attacking predatory lending practices.

Investment Overview:

Blackstar is focused on providing affordable homeownership to low- and moderate-income families by restructuring distressed mortgages and alternative seller-financed debt instruments. The goal is to help stabilize families and neighborhoods by preserving affordable single-family housing, enhancing equitable ownership, and attacking predatory lending practices. Thousands of families will enjoy benefits from the transfer of home equity to monthly payment reduction and mortgage principal reduction. Blackstar will provide investors compelling risk-adjusted returns, while consistently delivering meaningful impact to underserved families and communities.

Company Differentiator:

Blackstar's leadership team represents a compelling blend of significant institutional investment, housing policymaking, and grass roots entrepreneurial experience crafting and executing innovative solutions to affordable housing challenges. The principals have created and managed uniquely successful impact strategies addressing housing affordability. Notably, the principals designed and administered the nation's only profitable foreclosure prevention program using Hardest Hit Funds from the federal Troubled Asset Relief Program (TARP) following the GFC. This success became the basis for the increasingly efficient and scalable solutions that have led to Blackstar Stability's execution strategy.   

Investment Example

Blackstar's current portfolio consists of 181 single-family properties across 18 states. The impact and return projections remain strong, targeting a net 11-13% IRR. The impact highlight includes:  * Payment Reductions - 40% average reduction in monthly principal and interest payments * Equity Transfers - Average equity of $40k transferred to families; a more than 10x increase in their net worth * Principal Reductions - 20% average reduction of principal balance for underwater borrowers * Penalty and Arrearage Forgiveness - $5k average forgiveness

Leadership and Team

Cumulative Leadership Experience in Impact Investing:
30 years or more
Cumulative Impact Experience of Top Three Firm Leaders:
20 – 29 years
John Green – Managing Principal More Info

A co-founding principal of Blackstar Real Estate Partners, John Green directs firm-wide strategic planning, and leads the investment management efforts. John has over 18 years of real estate and finance experience, and has managed approximately $5 billion in commercial, multifamily residential and mixed-use properties in greater Washington, D.C.; New York City; Baltimore; San Francisco; and other major metropolitan areas within the United States. For the decade prior to founding Blackstar, he served as Managing Director for MacFarlane Partners, a San Francisco based real estate private equity firm. In that role, John led all investment and asset management activities in the East Coast markets, which included acquisitions, dispositions, and financing of property investments.

Erik Sten – Chief Investment Officer More Info

Erik was a four-term, elected City Commissioner, in Portland, OR from 1996 to 2008. In this role, he served as both policy maker and manager with executive authority over city Departments including the city’s Bureaus of Housing and Community Development, Environmental Services, Fire and Rescue, Water, Emergency Management, Energy and Cable and Franchise Management. As Housing Commissioner, he led and implemented one of the nation’s most comprehensive affordable housing agendas, which included strategies on chronic homelessness, income integration, workforce housing, homeownership for underserved communities, transit-oriented development, green building, sustainability, housing first, service enriched housing, the schools/housing connection and veterans’ housing.

George Scott – Principal Capital Markets/Investor Relations More Info

George Scott is a Principal at Blackstar focused on overseeing capital markets activities with respect to investor relations, equity sourcing, debt strategy and joint venture structuring. George has over 25 years of real estate and finance experience, raising and allocating more than $3 billion on behalf of institutional investors globally. Prior to joining Blackstar, George was a Senior Real Estate Investment Officer at New York Common Retirement Fund where he was primarily responsible for sourcing, structuring, negotiating and monitoring equity investments with both domestic and global fund managers, joint venture partners, operators and sponsors across various property types.

Percentage of Investment Professionals who identify as women:
Less than 25%
Percentage of Investment Professionals who identify as people of color:*
50% or more
Percentage of Senior Management Team who identify as women:
Less than 25%
Percentage of Senior Management Team who identify as people of color:*
50% or more
*People of color include: Black, Latinx, Asian, Native American/Alaskan Native, Pacific Islander, Middle Easterm and multi-racial Americans

Financial Performance

Target Financial Returns Relative to Benchmark:
Market Rates
Actual Performance of Impact Products/Funds Relative to Target Financial Returns in the Past Three Years:
In line with initial target returns
Financial Reporting Frequency to Investors or Donors
Quarterly

Impact Performance

Percentage of Total Assets Under
Management that are Impact Investments:
100%
Primary Impact Outcomes:
Other: Providing homeownership
Secondary Impact Outcomes:
Alleviating poverty
Increasing access to financial services
Addressing racial inequities
Value-added Services Offered:
Other: Wealth creation

Investments systematically target companies where social and/or environmental impact is integral to the product/service being created:

The success of Blackstar's investment strategy which has the dual purpose of doing well and doing good requires the management team to be keenly focused on making sure Blackstar is strategically aligned with all potential stakeholders who understand the overall mission and objective of helping low-and middle- income families achieve equitable homeownership. The targeted investor base, third party vendors and debt providers all have similar interest in achieving the social impact mission relating to affordable housing. Blackstar's strategy is based on transparency, communication and a consumer-oriented business model that proactively rights the wrongs of the contract for deed model that has historically benefited investors and not consumers. Given Blackstar's approach, it is expected that regulators will welcome Blackstar's involvement and there are ongoing discussions with some of these regulators to explore purchase opportunities in which a sale to Blackstar could be part of a proactive settlement.   

Investments systematically include social and environmental sustainability practices in the due diligence process:

Blackstar's business model is one that is focused on acquiring predatory debt products like contracts for deed ("CFDs") from originators/holders who have operated with a more predatory investment approach in assisting low-and middle-income families in achieving homeownership. The CFD market tends to stand apart from the more transparent and documented mortgage market as it lacks securitization, the GSEs, CRA and other market drivers. There is not an abundance of investors in acquiring CFDs like Blackstar due to the headline, legal and regulatory risk. The social impact investment approach Blackstar is bringing to market will help to distinguish Blackstar's efforts in addressing economic inequality relating to affordable homeownership for the most vulnerable population.   

Impact Tracking and Monitoring

Impact is Tracked:
Yes
Impact Verified by an Independent Third-Party:
No
Social and/or Environmental Impact is Reported to Investors and Donors:
Yes – to investors and donors
Third Party Validations:
Member of Impact Capital Managers
Impact Frontiers Cohort Participant
Implement recommendations from Task Force on Climate Related-Financial Disclosure
Net Zero Assets Managers Initiative
Utilizes standardized impact metrics (e.g. IRIS+, GIIRS, etc.)
Participant on steering committees or leadership roles within impact industry associations
Publisher or contributor to industry white paper or other research in impact investing

Learn More

Key Contact Name: George Scott
Phone: 202-713-3357
Mailing Address:

1250 Connecticut Ave, Suite 700, Washington, DC 20036, USA

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