SMU Cox Real Estate Impact Investment Fund Delivers Real-World Results
Dec 29, 2024
The Southern Methodist University (SMU) Cox Real Estate Impact Investment Fund was launched by the school’s Folsom Institute for Real Estate in early 2023. It provides students with an immersive way of learning about and creating lasting connections within the expanding Dallas real estate market. It also encourages innovative investment opportunities that have a positive, measurable impact on underserved communities.
The fund was initially underwritten by several major donors, the most prominent being Mimi B. and William “Bill” H. Vanderstraaten ‘82, who contributed more than $1 million as a lead gift. The Phillips Foundation subsequently contributed capital to the fund and to the SMU Impact Lab, which focuses on broader investments that generate financial and social returns for the “greater good.” The fund presently maintains in excess of $4 million under student management.
The Real Estate Impact Investment Fund’s mission starts with providing real estate students with scholarship support. This enables them to participate in a one-year joint BBA/MBA course that provides hands-on, experiential learning with an emphasis on investment management and private equity investing strategies. Students oversee a discretionary, open-ended investment vehicle that focuses on preferred equity and LP direct real estate holdings. These combine demonstrable social impact with profit-driven mandates at an appropriate level of risk.
Participants in the student-led fund are limited to 20 each year, with 10 BBA and 10 MBA students pairing up to form teams that work with SMU associates and analysts. SMU Cox - Folsom Institute for Real Estate director Joseph Cahoon teaches the curriculum in tandem with investment committee member Maria Stamolism, who also co-heads global investment firm Canyon Partners’ real estate division.
As Cahoon describes it, participating students are set up as “owners” in the sense that they do not passively receive information but use tools from class in undertaking investigations into social impacts and revenue prospects of existing projects. They engage directly with property investors and owners, creating case studies spanning existing developments such as strip malls and apartment complexes. This “ownership mentality” translates to pursuing real-world transactions that are likely to generate positive long-term results in overlooked and underserved neighborhoods. The social impact of investments undertaken is measured by SMU George W. Bush Institute researchers.
The ultimate aim of the practicum, described as a work in development, is reaching a $10 million capital-raising goal while staying true to the mandate of generating maximum social benefit alongside financial returns. As investments deliver capital infusions, the plan is for the fund to maintain an evergreen structure minimally reliant on outside contributions.
In July 2024, the fund successfully closed its second-ever transaction. Partnering with Price Realty Corporation, the fund acquired the 116-unit Fort Worth Monticello Apartments community for $250,000. Built in the 1970s, the complex is a stabilized property that delivers quality attainable housing to members of the Crestwood and Monticello neighborhoods. Housing here is increasingly expensive and unaffordable to local workforce participants.
Under the arrangement, Price Realty is responsible for leasing and managing in-house property. Profits generated from this and other holdings are divided equally between the scholarship program for SMU’s real estate-focused students and pursuing new and ongoing investments.