SOUTHFIELD, Mich.—The Michigan Credit Union League and Affiliates said it has now received $5.25 million in commitments to its Develop Michigan Real Estate Fund (DMIRF), and expects to have between $11 million and $17 million by the final closing date in March.
The fund also includes a $19.5-million investment by the Michigan Strategic Fund that provides first loss protection and reduced subordinated returns.
The fund, announced in August 2014, is the first Michigan-based capital investment fund to be 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.
“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 in a statement first published on the MCUL’s Monitor website. “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."
The DMIRF is open to state-chartered credit unions with more than $200 million in assets and 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 MCUL said. The Lansing-based company’s goal is to deliver risk-adjusted returns to investors while creating jobs and economic growth for Michigan.
The CUSO in turn will invest directly in DMIRF for various commercial real estate projects in Michigan. The MCUL said that if the model proves successful, MCUL will seek additional opportunities with Develop Michigan.
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