Manatt Represents Maycomb Capital in Social Impact Pre-K Financing

On November 25, 2020, Manatt’s Peter F. Olberg, Raisa E. Patron and June Kim represented Community Outcomes Fund LP at Maycomb Capital, a pioneering impact investing platform, in a social impact financing by Maycomb Capital of more than $6 million to First 8 Memphis. The Urban Child Institute, a Tennessee nonprofit corporation, also provided a subordinate social impact loan of more than $1.5 million. The proceeds of the loans will be used by First 8 to implement a high-quality, full-day preschool program benefiting students in Memphis and Shelby County, Tennessee.

The loan to First 8 is structured as an innovative outcomes financing—sometimes called Pay for Success—which is part of a national movement around evidence-based policymaking and procurement reform in the human services and education sectors. In an outcomes financing, investors, such as the Community Outcomes Fund and the Urban Child Institute, provide working capital upfront so that the providers have the resources they need to serve their community. Local governments, or other payors, pay for outcomes when they are achieved, and those payments are used to repay the investors’ working capital loans.

In this financing, First 8 is implementing the preschool program, and Shelby County and the city of Memphis will make outcomes payments based on the success of the preschool program, which aims to address the needs of children in the area for comprehensive and universal pre-K instruction regardless of income. The Community Outcomes Fund and the Urban Child Institute initially funded the preschool program for the 2019–20 school year via another outcomes financing, prior to which 1,000 preschool seats had been set to disappear due to an expiring federal grant.

For more information on the financing or on Maycomb Capital’s Community Outcomes Fund, click here.



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