Urban Investment Group Is Formed to Lead the Firm’s Impact Investing Efforts

Innovative financing solutions developed by the Urban Investment Group since 2001 help fuel growth in underserved communities.

Putting to work the belief that capital markets can and should play an important role in creating opportunities for underserved people and places, Goldman Sachs created the Urban Investment Group (UIG) in 2001. The group’s mission is to develop innovative capital solutions that strengthen communities and promote long-term economic growth. Partnering with local public and private sector leaders, UIG makes investments to strengthen the fundamental building blocks of opportunity – including affordable housing, commercial and community facility space in underserved areas, quality education and healthcare, and growth capital for social enterprises and small businesses.

When Goldman Sachs became a bank holding company in 2008, the firm became subject to the Community Reinvestment Act (CRA), a federal law enacted in 1977 with the intent of encouraging depository institutions to help meet the credit needs of individuals and businesses in their communities, including in low- and moderate-income neighborhoods. UIG is responsible for ensuring Goldman Sachs Bank USA’s compliance with the federal and New York State CRA. Goldman Sachs Bank USA has repeatedly received CRA ratings of “Outstanding” from the Federal Reserve Bank of New York and the New York State Department of Financial Services.

UIG has been a pioneer in creating innovative capital solutions to address complex community challenges. In 2012, the team created the United States’ first social impact bond – a then-nascent financial instrument that leverages private investment to support high-impact social programs. In 2013, UIG launched the GS Social Impact Fund, one of the first domestic impact investing vehicles to be sponsored by a major financial institution. Two years later, UIG financed the largest public housing energy retrofit through a structure that linked investor repayment to energy savings achieved in low-income housing in Newark, New Jersey. UIG is now a leader in investing in federally designated opportunity zones, which are distressed areas around the United States.

In 2018, UIG merged with the firm’s Global Special Situations Group (GSSG), in order to further extend the breadth and depth of Goldman Sachs’ principal investing businesses. By September 2019, UIG had committed nearly US$8 billion to underserved American communities. That same year, UIG and GSSG – along with several other groups within the firm focused on principal investing –  joined the firm’s Merchant Banking Division (MBD), allowing Goldman Sachs to offer an integrated investing platform to its clients and position these critical businesses for sustainable long-term growth.

 

This article was originally published as part of a series commemorating the 150th anniversary of Goldman Sachs’ founding in 1869.