MCUL Clears the Way for Additional Investment Opportunities for State-Chartered Credit Unions
MCUL & Affiliates has introduced the Develop Michigan Real Estate Fund (DMIRF), the first Michigan-based capital investment fund which was allowed by a 2012 Department of Insurance and Financial Services order authorizing CUSOs to provide products and services to state-chartered credit unions and their members.
As part of its mission to help credit unions serve, grow and remain strong, the MCUL has reviewed several investment opportunities that would fit in with credit unions’ investment strategies and have a positive impact on the communities they serve.
“MCUL was glad to play a small role in obtaining the regulatory authority to allow for these kinds of investments for state chartered credit unions,” MCUL CEO David Adams said. “This particular investment (DMIRF) will allow participating investing credit unions to invest in commercial real estate funds in Michigan that both improve Michigan’s economy and provide credit unions with a higher rate of return associated with the higher risk of these investments."
In August, MCUL introduced DMIRF as a potential investment partner to state-chartered credit unions with more than $200 million in assets. DMIRF is a for-profit limited partnership that invests in commercial real estate exclusively in the state of Michigan and provides a unique opportunity to investors committed to Michigan’s economic recovery, particularly in lower-income communities, while seeking a market rate of return.
The fund is managed by Develop Michigan Management Group, which has more than 20 years of experience managing more than 50 funds, all of which have met or exceeded projected results. The Lansing-based company’s goal is to deliver risk-adjusted returns to investors while creating jobs and economic growth for Michigan.
Based on feedback from credit unions, MCUL established the DMRIF Investing CUSO for state-chartered credit unions to invest. The CUSO in turn will invest directly in DMIRF for various commercial real estate projects in Michigan.
To date, the DMRIF Investing CUSO has received $5.25 million in commitments and expects to have a total commitment between $11 and $17 million by the final closing date in March. It also benefits from a $19.5 million investment by the Michigan Strategic Fund that provides first loss protection and reduced subordinated returns. If this model proves successful, MCUL will seek additional opportunities with Develop Michigan and other opportunities that fit this need.
For more information on this investing opportunity, contact Shawn Wolbert, MCUL’s senior vice president lending and operations/CFO, Shawn.Wolbert@mcul.org or (800) 262-6285, ext. 420.