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Alicia Glen, managing director at Goldman, Sachs & Co., heads the firm’s Urban Investment Group (UIG), which provides capital to underserved domestic urban markets. Under Glen’s leadership, UIG has become the industry leader in structuring complex public-private partnerships, catalyzing development across dozens of residential, mixed-use and commercial projects, as well as financing job creation and neighborhood revitalization strategies. An attorney, Glen previously held positions at the New York City Department of Housing, Preservation and Development; Fulbright & Jaworski; Kalkines, Arky Zall & Bernstein (now Manatt, Phelps); and Brooklyn Legal Services. Also an adjunct professor in the Finance and Economics Department, she teaches Social Impact Real Estate Investing and Development, which was offered for the first time in fall 2012. In a recent interview with Annie Koo ’14, she discussed how to connect the dots between the public and private sectors as well as her career path and teaching.
What are the biggest challenges facing U.S. cities today?
We cannot look at cities monolithically. There are cities that are growing rapidly—like Los Angeles and New York—which face expansion issues. They need to keep pace with growth by developing and preserving real estate assets like housing and infrastructure. On the flip side, there are shrinking cities such as Detroit and Philadelphia, which are facing the opposite challenge. To begin to answer this question, which is massive, we first have to acknowledge that American cities are very distinct.
What do you believe is the role/responsibility of business in addressing these challenges?
The private sector, and, specifically, the financial services industry, undoubtedly have a vested stake in cities. Banks are only as successful as their clients, and thus have an interest in cities being as productive and as diverse as possible, in becoming sources of innovation and economic growth. More than that, I would argue that banks have a moral prerogative to invest in local communities. Banks derive benefits from the cities they operate in and should provide benefits in return. If we subscribe to this long-term view, we would be hard-pressed to not envision a role for the private sector in cities. After all, we are in this together.
This can be a challenging agenda to pursue. Trying to articulate a need for things that do not have an immediate financial return can be tough, especially in a financial setting where investment is expected to maximize return in a short time frame. But I firmly believe that it would be untenable to overlook the long-term benefits of investing in cities.
How has your career evolved from law to government to finance?
It has been a long and wild ride. I have had a very non-linear career, but there have definitely been a few common threads, addressing questions like: How do we solve the problems facing our community? How can we find solutions among diverse stakeholders? These are broad categorizations, but they sum up my focus on the built environment and physical place-making.
For example, when I was a legal services lawyer, I worked to empower people to fight for their rights. Then when I worked in government, I saw how the public sector could finance an agenda for equitable real estate development. I also learned how important it is for the government to serve the poor and to use its administrative power to address urban inequality. Now, in finance, I see how capital markets can be leveraged to finance this agenda. In my career I have aimed to connect the dots between the public and private sectors to advance not only business profitability but also long-term social benefit.
What perspective has your cross-sector career afforded you?
To tackle these complex urban challenges, I think we need to eliminate vertical thinking. Being narrow in our thinking makes it incredibly difficult and inefficient to get things done on a large scale. For instance, we tend to think of real estate in terms of asset classes. I want to get out of these vertical silos. Rather than strictly housing or office groupings, I imagine cities themselves as an asset class. It’s about thinking horizontally—across industries and sectors. We need to get smarter about flexible, urban financing, for instance, and that requires thinking in innovative ways.
Take social impact bonds. For the first time, we have the private sector thinking about financing the provision of social services. Social impact bonds bring the financial acumen of the private sector to bear in the social sector. This innovative vehicle allows us to take a more holistic view, an approach that I think is crucial to confronting the complex challenges of cities.
[Editor’s note: Social impact bonds are a “pay for performance” model that allow private sector investment in public projects. Last year, UIG invested $10 million in the nation’s first social impact bond to fund a program called the Adolescent Behavioral Learning Experience (ABLE), aimed at reducing recidivism at the Rikers Island correctional facility. More information is available on the UIG site.]
You have successfully navigated both the public and private sectors. What advice do you have for young professionals seeking to be relevant to both?
First, do not think linearly. Don’t assume your professional life will follow a clear and well-trod path; assume it will be all over the map. Find things you love, and realize you can work on what interests you from many different angles. For instance, in real estate, you do not “have to” work in development. You can work in city government, or you could build infrastructure in Africa. You never know how your interests and passions will all come together. I can tell you the most interesting people have done many different things and can draw from diverse experiences. You simply cannot be risk-averse.
Second, do not be afraid to upset people. If you are not disrupting things, you are not moving an agenda forward. You need to shake things up. People might be upset with you, but they can certainly also respect you.
How did you get into teaching?
One of my mentors, Professor Lynne Sagalyn, introduced me to teaching. Mine is an emerging field, which, as Lynne convinced me, should be shared with students. Having the opportunity to train the next generation is pretty cool. Teaching is a time commitment, but it is also a gift to be able to carve out time to step back, reflect, and think about how this field is evolving.