investing roger vincent |
Charity is laudable, Bobby Turner says, but if you really want to raise enough money to improve a thorny social problem you have to introduce the profit motive.
An associate of 1980s junk bond king Michael Milken who made a fortune in real estate, Turner is now turning that personal philosophy into action.
He set up a company last year called Turner Impact Capital that seeks investors to pay for blue-collar housing, promising returns more typical of conventional moneymaking businesses.
And already some big names are risking capital to invest with Turner, a deeply connected Los Angeles financier who already has a similar fund with former tennis star Andre Agassi to build inner-city charter schools.
The Turner Multifamily Impact Fund launched in June so far has drawn investments from high-profile hedge fund manager Bill Ackman; Citi Community Capital, a division of Citibank that invests in affordable housing; the University of Michigan endowment; and Rockefeller Brothers Fund, a philanthropic organization operated by the Rockefeller family.
The fund recently acquired its first two properties: a 599-unit garden-style apartment community near Washington, D.C., for which it paid $58.5 million in June, and a 405-unit complex near Fort Lauderdale, Fla., that it bought for $45.7 million last month. He's looking for similar properties in Southern California.
Ultimately, Turner, 52, wants to buy and manage $1 billion worth of apartment complexes with 10,000 units in urban centers throughout the country. It's a strategic turnaround for a man who has given millions of dollars to charitable causes but questioned the long-term value of his largesse.
"For 30-odd years I was a very successful capitalist," said the former partner at Canyon Partners, a Los Angeles hedge fund that has more than $24 billion in assets under management. "I made great wealth for myself but didn't fulfill my sense of spirituality. I was being reactive and creating legacies of dependency."