In April 2021, following a wave of racial and social unrest, New York Life solidified its commitment to actionable change by launching a $1 billion impact investment initiative. NYL seeks to help bridge the racial wealth gap by investing in underserved and undercapitalized communities. Specifically, we deploy capital to support affordable housing, small businesses, and community development. Our goal is to create positive social outcomes while also seeking to deliver sustainable risk-adjusted returns. These two objectives are not mutually exclusive. In fact, we believe investing in underserved communities potentially leads to more business development which begets meaningful social and economic returns, a virtuous cycle.
Why the Racial Wealth Gap?
As one of the largest life insurance companies in the United States, NYL is keenly aware that financial well-being is inextricably linked to favorable life outcomes. As such, we remain committed to doing our part to help ensure that all people have equal opportunities for a good life. However, generations of inequality across various social structures and policies have created vast disparities in wealth along racial lines.
In the US today, the median wealth of a Black family is 10% of their White counterpartsi. This imbalance has severe consequences. For example, people living in low-wealth zip codes may have a life span that is 20 to 30 years less than those living in wealthier zip codesii. The Covid-19 pandemic has only widened these chasms and foreshadows an unsustainable future in the absence of enduring change. NYL recognizes the urgency to address America’s racial wealth disparities and has tailored its impact investing strategy to that end.
To help bridge the racial wealth gap, our impact strategy is centered on developing large-scale solutions and investment structures that deliver broad and inclusive economic outcomes linked to personal and household advancement, job growth, and health and wellness. We believe we can achieve this by focusing on the following impact areas:
No single institution alone can bridge the gulf caused by generations of inequity, however, there is power in numbers. NYL has partnered with diverse asset managers, federally chartered CDFI’s, and other mission-driven organizations to amplify our impact objectives. When coupled with our well-established institutional capabilities across private credit, private equity, real estate, and public markets, these partnerships potentially will ensure that we are using best-in-class strategies to achieve our impact and return objectives.
In the first eighteen months of the program, NYL fully committed the $1 billion across various investments that are at the heart of our impact thesis, and we continue to seek additional investment opportunities to expand the program beyond our initial target. Some key highlights of our program include:
Impact Measurement and Tracking
To ensure that we are meeting both our impact and return objectives, NYL tracks the dollars we invest to capture immediate community outcomes like the number of businesses supported and housing units created or preserved. Longer term, we will work with our partners to develop systems that can help measure the multiplier effect from our investments to track the impact on wellness, education, and economic activity in the local community.
While there is plenty of work left to be done, we are encouraged by the momentum of our program thus far and are excited about the contributions of the life insurance industry to address social impact initiatives. We also hope that our endeavors encourage other leading life insurers to develop their own impact investing initiatives. NYL looks forward to collaborating with industry peers to demonstrate our combined commitment to effect positive social change.
NYL has assembled an advisory board of industry leading executives who are instrumental to the success of our impact investing initiative. Members include: Lori Chatman, Co- CEO (interim), Enterprise Community Partners; Julie Herwig, Senior Vice President, Head of the Office of Governmental Affairs at New York Life; Chauvon McFadden, Principal, Crimson Wealth Strategies LLC; Dr. Laurence Morse, Co-founder and Managing Partner, Fairview Capital Partners; George Nichols, President and CEO, The American College of Financial Services; and Roy Swan, Director, Mission Investments at the Ford Foundation.
NYL Impact Investing Team
NYL Investors manages and provides oversight for certain assets of the NYL General Account.
Executive Vice President, Chief Investment Officer
Managing Director, Head of Investment Grade Credit Team and Impact Investing
Senior Director, Impact Investing
i. Brookings, https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/
ii. Jessica Owens-Young, PhD, Assistant Professor of Health Studies at American University, https://www.bluezones.com/2020/02/zip-code-effect-your-neighborhood-determines-your-lifespan/
Data herein are current as of the date appearing in this material only. This material is for informational purposes only and should be constructed as an investment advice or an offer or solicitation to buy or sell securities. This material contains examples of NYL Impact Investing and is not intended to represent any product or strategy offered by NYL Investors LLC.
Impact Investing Risk: Impact investing may take into consideration factors beyond traditional financial information to select investment, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, manager may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.
NYL Investors LLC (“NYL Investors”) is a wholly owned subsidiary of New York Life Insurance Company. NYL Investors affiliates may develop and publish research that is independent of, and different than, the views expressed. Past performance is not a guarantee of future performance results.
About New York Life
New York Life Insurance Company (www.newyorklife.com), a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States1 and one of the largest life insurers in the world. Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life has the highest financial strength ratings currently awarded to any U.S. life insurer from all four of the major credit rating agencies.2.
1. Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, 5/23/22. For methodology, please see http://fortune.com/fortune500/.
2. The “highest ratings currently awarded” refers to the highest ratings currently awarded to any U.S. life insurer, specifically: A.M. Best A++ (as of 9/14/22), Fitch Ratings AAA (as of 10/18/22), Moody’s Aaa (as of 12/9/22), and Standard & Poor’s AA+ (as of 7/29/22). Source: third-party reports.