Investors Devote $13.5-Million to Combat Recidivism in New York
January 3, 2014 | Read Time: 1 minute
A group of high-powered investors have put $13.5-million into a social-impact bond to finance a program aimed at lowering recidivism rates for newly released prisoners in New York, Reuters reports.
Among the more than 40 private investors and their foundations investing in the bond issued by Merrill Lynch and U.S. Trust are the hedge-fund billionaire Bill Ackman, the Laura and John Arnold Foundation, and former Treasury Secretary Lawrence Summers. The returns will depend on the success of job-training programs for 2,000 ex-convicts.
Investors were drawn from high-net-worth Bank of America clients and their families and foundations. The bond is the first so-called “pay for success” program involving Bank of America, and the first involving a U.S. state. About 20 social-impact bonds have been issued worldwide.
