Those are questions that Momentus Securities, a registered broker-dealer and FINRA member, is helping to answer. Launched in 2023, Momentus Securities is a rarity: an investment bank with a social purpose.
“Our goal is to help the smaller mission-driven lenders who have historically been underserved by the larger Wall Street banks,” said Jaime Aldama, the President of Momentus Securities, who joined this effort after more than two decades with some of the most recognizable investment banks and financial services firms.
“Those banks tend to focus more on larger investment opportunities than what the smaller mission-driven lenders work with,” Aldama added. “Momentus Securities bridges the gap between capital markets and mission-driven lenders, attracting the kind of capital that has not been able to be deployed in this ecosystem.”
The key is to remove the logjam that mission-driven lenders and organizations often run into. These lenders want to support more small businesses and community development efforts. Yet they can’t scale up unless they have more liquidity. And they can’t get more liquidity unless they move deals off their balance sheets.
The problem: Mission-driven lenders simply aren’t able to do this at a scale that is attractive to investors.
These are familiar concerns, and the opportunities that can come by solving them greatly excite the team at Momentus Securities, many of whom left roles with other financial services companies in order to work on this project.
Momentus Securities is part of the Momentus Capital branded family of organizations — which includes two national, nonprofit mission-driven lenders. Momentus Capital is not only committed in its own work to building inclusive and equitable communities, but also wants to help other similar organizations that are doing the same.
Here are some of the many ways Momentus Securities is doing that:
Momentus Securities is creating warehousing lines within five key themed areas — affordable housing, healthcare, education, small businesses, and food. It aggregates portfolios of loans made by all lenders focused on these issues throughout the United States, including mission-driven lenders. This goes well beyond the niche portfolios of “green bonds” and “social bonds” that are out there but haven’t significantly helped mission-driven lenders.
In one recent example, Momentus Securities engaged with a mission-driven lender that wanted to sell their loan portfolio to recycle their capital, but had not yet been able to do so. Momentus Securities not only helped this client — but also got them a better price than would otherwise be expected in traditional routes.
Our goal is to help the smaller mission-driven lenders who have historically been underserved by the larger Wall Street banks.
One of the key tools is to help mission-driven lenders get rated by the major rating agencies, which is essential if they are to seek funding from the capital markets. For many smaller lenders, however, this process can be expensive, complicated and time-consuming. Acting as an intermediary, Momentus Securities removes the burden from these lenders’ shoulders.
“I worked for 17 years for two rating agencies and developed a rating path for mission-driven organizations,” Mr. Alexander added. “Helping them access the market directly helps with rating hurdles.”
Momentus Securities is clearly disrupting traditional practices — and is at the forefront of shaping a more inclusive and equitable financial future.
Learn more at momentussecurities.com/fsr
