LOS ANGELES—Turner Impact Capital has launched the Turner-Agassi Charter School Facilities Fund II to invest up to $1 billion in charter school development nationwide. The fund plans to build 130 charter schools for best-in-class operators by 2020. This is an evolution in Turner's social-impact investment model, which simultaneously produces investor returns—as much as 12%—while promoting and motivating positive social change.

Bobby Turner, CEO of Turner Impact Capital, expects the fund to hit $400 million in commitments by late November 2015. The remaining $600 million of the $1 billion fund will be secured through construction debt. “We've already had our first closing with more than $150 million, and we expect to close out the fund by the end of November,” Turner tells GlobeSt.com. “We are also incredibly excited to announce that we have partnered with Merrill Lynch to offer up to $100 million of the fund to clients of their private banking platform. It is exciting for us because it is an opportunity to enable individual investors, not just institutional investors, and high net worth individuals to be a socially impactful investor.”

In addition to Merrill Lynch, the investors in the fund include the University of Michigan endowment, the Texas Permanent School Fund and Citibank. The fund has a $5 million investment minimum and will focus on developing the facilities in dense and distressed neighborhoods nationwide. The schools will be net-leased to charter school operators. “We build environmentally friendly and learning-friendly educational facilities for best-in-class charter school operators,” says Turner. “In essence, we are a build-to-suit private equity fund with the caveat that we provide a bridge to ownership.”

Although Turner will not run the completed schools, his firm will serve has the landlord of the facilities until the schools are stabilized. Then, he will provide the schools with the opportunity to purchase the facility. “We want to be a bridge to ownership recognizing that no one has ever gotten rich in the landlord tenant relationship, except the landlord,” says Turner. “We want to the operators to own the facilities, because when you are paying a mortgage rather than rent, with every monthly payment, you are paying down principal, creating equity and on the path to sustainability of the organization itself.”

The company also invests in workforce housing as part of his social-impact investment strategy. Earlier this year, he launched a $1 billion fund to acquire and manage multifamily workforce housing in urban markets across the US.