Aeris is the information service for community investors. Aeris’ mission is to increase investment and knowledge that benefit underserved markets. We provide ratings, data, and consulting that support investors’ due diligence and monitoring of community investments. Aeris (previously known as CARS) was founded as a project of Opportunity Finance Network in 2004, spun off as an independent entity in 2012. Aeris is a social enterprise structured as a 501(c)(3) nonprofit organization.
CDFIs—community development financial institutions—are mission-driven financial institutions that make targeted loans and investments to benefit low-income and underserved markets in the U.S. View a brief video about CDFIs.
Aeris was created in 2004 as an independent project of Opportunity Finance Network (OFN), the national network of CDFIs. From the outset, OFN’s intent was to form a separate, independent entity that would be viewed as truly objective and independent. Aeris, then known as “CARS,” was spun off from OFN in January 2012, and is now an independent corporation with its own governing board of directors consisting of experts in financing, CDFIs, and impact investing.
Aeris supports itself through subscription fees paid by investors, rating fees paid by the institutions and funds we rate, consulting fees from investors, and grants provided by national foundations and corporate philanthropy. We believe that acting on behalf of investors helps Aeris maintain its objectivity in the rating process. Accordingly, the majority of our revenue comes from investor-paid subscriptions. This keeps the cost of our ratings low and makes it possible for smaller institutions to afford a rating.
A combination of the Greek word “aer” (air) and the initials I.S. (information service), the Aeris name denotes our effort to increase transparency in community investing through improved information.
An Aeris rating includes two ratings: one for impact performance; and one for financial strength and performance. AAA is the best possible financial strength and performance rating. BBB- or better is considered investment-grade. Four stars is the best possible impact performance rating. Aeris also may issue a “Policy Plus” designation that recognizes leadership in public policy advocacy that benefit disadvantaged people and communities. Based on this approach, the best possible rating is Four Stars AAA with Policy Plus. The current ratings distribution, as well as a detailed description of the meaning of each rating is available on our Web site.
While the Aeris financial rating scale is meant to align with the scales of Wall Street rating agencies, the Aeris rating is not directly comparable to other agencies’ ratings. Aeris Financial Ratings are based on an assessment of capital strength, asset quality, management, earnings, and liquidity—often referred to as a ‘CAMEL’ assessment. The Aeris methodology evaluates financial strength and risk in the context of the community finance sector, and does not use statistically-generated benchmarks due to the limited size of the sector, the wide variety of business models and operating environments. While the scales are not directly comparable, Aeris considers BBB- and above to be investment grade, as do Wall Street agencies.
The Aeris Impact Rating Report is a new, standalone impact rating report introduced in 2017. Prior to 2017, Aeris impact ratings were only available in the full Aeris Rating Report. The Aeris Impact Rating Report contains both the financial strength and impact ratings. The report also contains narrative analysis and quantitative data evaluating:
- Alignment of strategy and operations with the entity’s or fund’s stated mission
- Effective use of resources in pursuit of that mission
- Tracking of outputs that show effectiveness
- Tracking of outcomes or impacts that indicate the organization is making progress achieving the impact it seeks to create
If Aeris awards a “policy plus” designation, the report also will describe the entity’s or fund’s public policy initiatives.
Aeris does not release ratings to the public. However, there are several ways to access a rating:
- Purchase the Aeris Rating Report—or purchase a subscription to our full ratings database
- Contact a rated entity to request its Aeris rating certificate
- Visit the entity’s Web site, as some funds choose to publish their rating
Aeris encourages ratees to promote their rating as a testament to their commitment to transparency and accountability. Ratees can log in to the Aeris Cloud, where they can access “Aeris-rated” logos suitable for display on digital or print marketing materials. Aeris also provides rated funds with a ratings certificate that may be shared with investors or other interested parties. Please note that ratees may not share their Aeris Rating Report with investors or other third parties. These reports may only be purchased directly from Aeris.
The nation’s leading community investors subscribe to Aeris’ data and analysis products, as well as our advisory services. Our subscribers include foundations, major banks, government agencies, pension funds, CDFIs, insurance companies, wealth managers, and more. View our subscriber list.
Since 2004, Aeris has rated more than 120 CDFIs and funds. To view the current list of rated institutions, visit our CDFI Selector and use the “rated” filter.
Funds voluntarily opt to become rated. Most often, loan funds initiate the Aeris ratings process, sometimes in response to a request by an investor or another stakeholder. Loan funds or investors can contact Aeris about initiating the ratings process. The ratings process itself involves document submission, a two-day site visit by analysts, reviews and corrections of the analysis by the loan fund, and a one-page written response to the analysis by the ratee.
CDFIs choose to become rated for many reasons. Some use ratings to demonstrate their transparency and accountability to investors, grant makers, government, and other stakeholders. Others use the Aeris ratings process to strengthen their impact or risk management operations based on potential improvements identified in a rigorous, third-party analysis. Some CDFIs become rated to support the industry’s movement toward recognition as a mainstream investment opportunity. An increasing number of investors specifically request that a loan fund become rated (or report data to Aeris). Some loan funds become rated for all these reasons—and many others.
Aeris analysts comprise a team of finance professionals, both staff and external consultants, that prepare ratings analyses, provide quality control review, participate as a voting member of the ratings committee, and, from time to time, contribute to modifications and adjustments to the ratings methodology. Aeris analysts are among the most experienced and sought after advisers and underwriters in the field.
The Aeris Cloud is the first-ever online portal for data and analytics on the financial and impact performance of CDFI and community loan funds. It is also the online portal through which Aeris subscribers access Aeris Rating Reports and rated and reporting CDFIs upload data and supporting due diligence documents. The Aeris Cloud provides multiple information touchstones to help CDFIs, other funds, and investors understand the impact and financial performance of individual institutions and the industry overall. The Aeris Cloud comprises several data and analytic products, including Aeris Performance Maps, Aeris Explorer, and Aeris Opinion Reports.
Any CDFI or loan fund may report its quarterly performance data to Aeris for free, regardless of whether or not it is rated by Aeris. All rated institutions report data to the Aeris Cloud as part of maintaining their Aeris rating. After an initial onboarding step, quarterly data submission is simple and automated, and takes most funds under five minutes. Funds that report data to the Aeris Cloud gain free access to a powerful management tool that enables the fund to compare its performance to others in its sector. In addition, since investors are increasingly adopting the Aeris Cloud for quarterly portfolio monitoring, reporting entities are gaining efficiencies by uploading data once rather than having to report financial performance in multiple formats to myriad investors. Contact us if you are interested in reporting data or read more about how you can use the Aeris Cloud.
CDFIs pay annual fees of $3,000-7,500 for their Aeris rating. Rated institutions commit to a full, three-year rating cycle. Contact us if you are interested in becoming rated. Aeris has a wide range of subscription options for accessing rating reports and data. Please contact us for full pricing information.