REAL PEOPLE MAKING REAL IMPACT
Investing in minority-owned businesses: An interview with Reginald Ross
Reginald Ross shares how MetLife Investment Management (MIM) Real Estate’s goal of investing over $500 million with women sponsors can impact communities and generations to come.
Hi Reginald, it’s great to see you. Tell us more about this particular goal. Why women-owned businesses?
Well, we’ll start with the importance of intention. Access to capital tends to be relationship driven, and most people’s relationships are largely within their own gender and ethnic groups. So, if you're not intentional about opening up relationships with communities of people outside of your own group, it is unlikely that you will in any meaningful way.
For a number of reasons, women have traditionally not had access to many parts of the commercial real estate business, and they’ve had even less exposure to the capital investment aspects of it. That’s why we’ve identified women as a traditionally underserved group for institutional investment and want to make sure we are creative in reaching them.
Moreover, if you think about it, you invest in a woman-owned company – because of what we mentioned before about relationships – then that company is likely to hire other women when the time comes. So, one direct investment can have spillover effects that go beyond that investment, but still advance our goals.
What's the bigger impact of this kind of investment for communities?
As one example, we've made some great inroads with a certain Latinx community in Texas with some of our agricultural loans. If these investments do well, then there is a track record with creating returns for investors that the individuals involved can point to when pursuing additional institutional capital, either with MetLife or other sources.Spillover happens for the community when those businesses expand and the individuals involved develop increasing levels of expertise in their existing products and leverage that into related projects, which will also have a need for, and potential access to, capital. The cycle then repeats itself.
These businesses can be passed down to children or create opportunities for other young people in the community. As such, we believe there's a spillover effect that can become self-sustaining, leading to a generational impact if we can make the right decisions now.
What’s your advice for other companies interested in investing in minority-owned businesses?
I would say it's extremely important to be intentional, but you must balance that with making the right investments. You can't lower your investment standards. You can’t start doing things differently and risk diminishing the business you’re in, which is providing returns to investors.
In fact, you’d be doing that Latinx community mentioned in the prior question a disservice by becoming careless with your investment selection.. This is because the adage “once bitten, twice shy” applies to capital investment, maybe more so here than to anything else. A community where capital is “twice shy” is one that will simply have fewer opportunities to offer the people in that community.
However, what we’ve said from the beginning was that there are clever and hardworking equity sponsors and borrowers across all genders and ethnicities. You just may need to get a little more creative with finding them and making sure they know that you’re interested in their projects.
To learn more about MIM and their commitment to sustaining lives with each investment, visit their website here.