Habitat lands low-cost financing line
Twin Cities Habitat for Humanity and Minnesota Housing have entered into a 10-year, $25 million agreement that Habitat said will help it increase affordable-housing production in an increasingly expensive market.
The partnership with Minnesota Housing gives Habitat access to a flexible, low-cost credit line, allowing Habitat to respond to land-and-property acquisition opportunities in a tight housing market. The financing was negotiated over several months by just-retired Habitat CEO Susan Haigh.
In the fiscal year that ended June 30, Habitat helped 93 families achieve homeownership through its new-construction, rehab and low-cost financing programs, including home buyer education. That number is expected to grow to 110 households next year, double what Habitat has done historically.
Roughly 90 percent of Twin Cities Habitat home buyers are minority households, who tend to have lower incomes.
“This partnership provides an essential ingredient for the [Habitat] Impact 2020 plan to double the number of households that Twin Cities Habitat can serve each year,” said Minnesota Housing Commissioner Mary Tingerthal. “This is an important part of Minnesota Housing’s strategy to extend more homeownership opportunities to households of color and close Minnesota’s homeownership gap.”
Impact 2020 was catalyzed by a partnership with Bremer Bank, valued at $98 million. Bremer committed to buy Twin Cities Habitat’s mortgages at a below-market rate.
“The line of credit from Minnesota Housing, paired with financial commitments from Bremer and Twin Cities donors, will help multiply the impact, so hundreds more families will have the opportunity to purchase a home of their own.” said Habitat CEO Chris Coleman, the former St. Paul mayor.
Neal St. Anthony
Annual ‘Russell Shuffle’ moves Supervalu
Every June, the Russell U.S. stock market indexes get a major reconstitution including the Russell 3000 and Microcap Indexes.
The indexes are adjusted to account for stocks that have been added to or removed from the stock market.
One notable addition to the Russell Microcap Index is Supervalu. The drop to the Microcap Index might be humbling for Supervalu; with $14.2 billion in annual revenue it is also one of Minnesota’s Fortune 500 companies (the Fortune 500 is based on total annual revenue).
An annual review by the team at global-index provider FTSE Russell is needed to ensure the indexes remain representative of the market’s current state. The annual reconstitution process starts with all publicly traded U.S. companies and then removes those that are not eligible. Companies are then ranked in descending order by market capitalization as of May 11. The team then determines the absolute breakpoint on where the indexes should be divided — the breakpoints shift each year based on overall market performance.
The Russell 3000 is made up of the top 3,000 U.S. stocks by market capitalization and covers 98 percent of the U.S. equity investable universe. The Russell 1000 and Russell 2000 are subsets of the Russell 3000.
The Russell Microcap Index contains approximately 1,500 stocks with market values of $30 million to $1.1 billion. The Eden Prairie-based grocery wholesale and retail holding company has a market cap of less than $800 million.
Beth Lilly, owner of Crocus Hill Partners, a St. Paul-based value investment firm that focuses on small and micro-cap companies, has invested in Supervalu and said she thinks CEO Mark Gross is making changes that will unlock more value for shareholders. “Mark Gross quietly has [taken] steps to take a business that was not very-well managed in the past and is doing a good job managing it better, taking out costs and surfacing its value,” Lilly said. “We believe that there is still a lot of value in Supervalu. Over time that value is going to resurface.”
Supervalu shares are trading around $21; up from a 52-week low of $13.60 per share on Feb. 22.
Brimacomb adds emerging-company fund
Rick Brimacomb has worked as a venture capitalist, in private equity and, since 2005, at his own consultancy.
He just launched a small venture fund that he expects to invest $50,000 to $150,000 apiece in as many as 10 emerging firms over the next three years.
The lead investor in Brimacomb Capital is Highland Bank.
“This just formalizes what I’ve been doing for several years,” said Brimacomb. “My investors and network allow for portfolio companies to access [funds] beyond Brimacomb Capital. I help companies understand and access the spectrum of capital markets. From angels to VCs, PE, banks and IPOs.”
Brimacomb, 54, worked at Norwest Equity Partners, the Smaby Group and Sherpa Partners, before hanging his own shingle. He helped nurture Provation Medical, which sold for $100 million-plus; and Xiotech, Phil Soran’s first company, which sold to Seagate 20 years ago for $360 million.
Brimacomb advises Sentera, the fast-growing agricultural drone company developed by engineers who created some of the first drones for the military. Sentera raised $8.5 million in expansion capital in 2016 and is expected to announce new developments this summer.
Neal St. Anthony