Can Financial Acumen Supercharge Social Impact? The case of the redevelopment of Spofford in the Bronx
15 Pages Posted: 29 Mar 2021 Last revised: 18 May 2023
Date Written: February 26, 2021
Abstract
When Eric Clement graduated from the University of Oxford's Saïd Business School executive MBA program on his 37th birthday, he decided to look for the new El Dorado: jobs in the high-octane private equity industry. These were simply the most sought-after jobs out there-the pay was high! The firstborn son of Panamanian immigrants in the U.S., Eric grew up in a middle-class suburb of NYC and had been working since he was 11 years old. From a young age, he understood how difficult it would be for him to move up the socioeconomic ladder. Since his parents were immigrants, they did not have the social networks that could help open up a path for their son to a lucrative career. Finally, he had the degree, knowledge, and experience required to include himself in the ranks of private equity investors. But then, Eric was offered an opportunity to join a government organization, where he would hire fund managers to make investments and where he would have to focus on the social impact of his commitments. He was intrigued. Eric wondered, could he use the finance skills he had acquired throughout his career to improve the lives of underrepresented people so they would not have to go through what he had gone through? What if a hard-core finance chap like himself stepped into a world where financial acumen was rare? What if he took the opposite seat at the negotiation table, effectively hiring the people he wanted to join, and got them to be more responsive to social needs? What would happen then?
Keywords: Valuation, Real Estate, Social Impact, Debt structure, capital structure, financial modeling, big project management, public private partnership
JEL Classification: G24
Suggested Citation: Suggested Citation