Also by Reinvestment Fund

First-of-its-Kind $10 Million Pay for Success Fund Announced

Fund to target policy interventions in social services, health care, housing and education

Philadelphia, May 31, 2017 — Reinvestment Fund today announced the creation of a $10 million Pay for Success (PFS) Fund to support PFS transactions in the United States. QBE Insurance Group, one of the world’s top 20 general insurance and reinsurance companies, plans to invest $7 million in the fund. Living Cities, a collective of the world’s largest foundations and financial institutions, plans to invest $2 million.  Reinvestment Fund will invest $1 million from its core loan fund, which is supported by more than 850 impact investors. Reinvestment Fund will also manage and administer the fund.

PFS is an innovative financing mechanism that aligns private investment with promising policy interventions and high impact social services, while offsetting the financial risk if the programs do not achieve the desired results.

“We are excited to launch this fund with some of the most experienced PFS investors in this still nascent field in the United States,” said Don Hinkle-Brown, President and CEO of Reinvestment Fund. “The PFS Fund offers an innovative organized capital source that will bring efficiency to these transactions by reducing costs and speeding deal execution.”

The PFS Fund will support the scaling of promising policy interventions, and is likely to grow as it is proven effective.  This first of its kind PFS financing mechanism is an important opportunity to align private investment, public policy innovation and high-impact social services. The PFS Fund will support transactions across a range of policy areas, including but not limited to social services, health care, housing, and education.

“Investing in the first Pay for Success fund in the United States is an important step in QBE’s ongoing commitment to the development and institutionalization of this market. Since 2014, QBE has invested in PFS and social impact bonds in the US, Australia, UK and Canada. We believe this financing mechanism has an important role to play in directing capital to what works, while aiming to make a financial return as well as a difference to communities,” said Gary Brader, Chief Investment Officer for QBE Insurance Group. “This investment fits nicely with our Premiums4Good initiative, whereby we undertake to invest a portion of selected customer premiums into assets which are socially or environmentally beneficial.”

To date, most PFS transactions have been supported by a range of niche investors, and a small number of institutional investors, placing capital because of interest in a specific policy area or a geography. This has made it hard for investors to develop broad expertise in the field and has led to challenges in underwriting, structuring, and closing, which have delayed and added costs to transactions. The PFS Fund will be a dedicated vehicle engaged specifically in the work of investing in PFS transactions, and as such will be able to carry forward lessons learned across multiple transactions.

“Having invested in a number of Pay for Success projects to date, Living Cities has seen the power of the PFS model in driving higher-performing programs, more impactful investments, more innovative government processes, and continuous improvement amongst project partners—all while maintaining a shared focus on outcomes that will measurably improve people’s lives,” said Ben Hecht, President & CEO, Living Cities. “The PFS Fund is a major step toward accelerating the evolution of the PFS market. We are excited that this vehicle will promote greater opportunity to continue learning about the role of private capital in addressing some of our country’s greatest challenges.”

The PFS Fund will focus on small cap transactions, in which a $2-$4 million senior loan from the PFS Fund would represent all or a majority of the senior debt to that transaction. These investments will always ensure a direct link between investment success (return of principal and achievement of desired return) and policy success or social impact. The PFS Fund will only meet its investment goals if key social impacts are achieved. Indeed, the connection between financial return and social impact is inherently intertwined in PFS transactions – more so than in almost any other kind of impact investment.


About Reinvestment Fund

Reinvestment Fund is a catalyst for change in low-income communities and one of the most experienced PFS lenders in the United States. We integrate data, policy and strategic investments to bring high-quality grocery stores, affordable housing, schools and health centers to the communities that need better access—creating anchors that attract investment over the long term and help families lead healthier, more productive lives. Reinvestment Fund has participated in four PFS transactions to date. Learn more at


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