Dr. Van Williams from ProActive Realty Group discusses how his experiences drive his belief in impact investing and fighting misconceptions about the profitability of investments in affordable housing
While impact investing and ESG have become hot topics in the investing world, they’re often talked about in the abstract, with a general tentativeness on the part of some in the industry to embrace ESG because of fears that it will affect returns. But conscious investors have been choosing to focus on impact for a long time, and their experiences can be informative for managers and investors working today.
One such pioneer in the impact space is Dr. Van Williams, who has over 22 years of active experience in real estate investment and management and currently operates the ProActive Realty Group.
ProActive Realty Group provides investors with the opportunity to participate in socially responsible investing while enjoying healthy returns. Managing multifamily real estate investments in economically underserved areas, the fund prioritizes consistent cash flow and long-term capital appreciation.
We spoke to Dr. Williams about what drives his work to create affordable housing, what misconceptions hold back progress in the impact space, and how impact monitoring can position funds for success with the next generation of investors.
Can you tell us a little about Proactive Realty Group, and specifically your Income Fund?
Williams: The ProActive Income Fund is a real estate income fund that repositions poorly-performing class C properties and turns them into revenue-generating machines using proprietary solutions while keeping with ESG standards.
Let’s talk a bit about the areas the fund is hoping to target. Why was it important to focus on these areas now?
Williams: We love the Social Impact and Opportunity Zone space. Putting capital to work in some of America’s poorest communities enables us to make transformative change for people located in these distressed communities without gentrification. It is important that the ProActive fund lead the charge in OZ and focus on the affordable housing space because we are one of the few ESG Funds that can positively transform communities nationwide legitimately and without impact washing.
What about your background has led you to your passion for impact investing?
Williams: I have been investing in multifamily properties located in distressed communities for over 22 years, before impact investing became a mainstream topic. In those years, I have witnessed first-hand the effects that poverty and gentrification have had on communities.
With a doctorate in Psychology and my experiences working in distressed communities, I believe I have developed the appropriate economic and social tools to handle all the challenges of impact investing in this space.
I have seen first-hand that when supplying American communities with affordable housing options, that mental health, stability, economic security, safety and physical health improve with compounding results. These metrics are the ROI that build and sustain communities. Welcome to my world!
What do you see as the key to balancing your desire to provide affordable housing with the need to offer competitive returns for investors?
Williams: The ProActive Income Fund does not need to balance affordability and returns. There is this false stigma out there that if you invest for social impact that investors will not receive competitive returns. Affordability and returns are not mutually exclusive, and we have proven it by providing double-digit returns to our investors in 2020 throughout the pandemic with zero distribution interruptions and 100% rent collection during this period. Our future returns will increase substantially over 2020’s returns as we continue to add more affordable housing units to the ProActive Income Fund’s portfolio.
Are there areas of the industry that you see as primed for growth that haven’t been tapped into? Where do you see impact investing headed in the coming years?
Williams: We see the impact/ESG space growing exponentially as younger generations are more conscious of where they are investing their money and do not want their investment dollars contributing negatively to climate change, gentrification and other societal issues affected through investing. Because this generation is conscious of social issues, more money is starting to flow to clean energy, affordable housing and clean water solutions, creating a new wave of investing and technology with positive social impact.
How does impact monitoring fit into your plans for the fund? Do you have specific goals for things like job creation, and by what metrics do you deem a project a success?
Williams: Impact monitoring is at the core of our fund. Wealth building is a key metric for us. Residents who rent from ProActive Income Fund properties do not have to choose between paying for their groceries or paying for rent. By providing affordable housing solutions, our residents don’t need to work 300 hours a month just to pay for housing. This allows our residents to save more money, build up their bank accounts, build wealth and social mobility and most importantly…spend more quality time with their families.
Together We Grow
To learn more about ProActive Realty Group and its Income Fund, visit their website.