Spotlight Series: Kip Kimble, Vice President, Investments
Foss & Company is comprised of a group of experienced professionals, representing the best in class within their respective fields. In this blog series, we highlight different Foss & Company team members to shine a light on the diverse and dedicated people that help make us who we are.
Kip Kimble joined Foss & Company in February 2020. As Vice President of Capital Markets, Kip works with insurance companies, financial institutions and other companies to redirect funds earmarked for state and federal taxes into investments that generate tax benefits, cash flow and other benefits including improved ESG ratings. Additionally, Kip runs Foss & Company’s debt platform that sources and places project level debt for Foss developer clients to go alongside Foss tax equity investments. Kip brings more than 30 years of commercial real estate and debt experience to the company. Kip graduated from the University of Michigan in 1985 with a Bachelor of Arts degree with a major in Economics within the school of Literature, Science and the Arts.
Get to know Kip in the latest Spotlight Series Blog:
How did you get started in the tax credit investing industry?
After a long career in commercial real estate banking and debt placement, the learning curve had flattened out and I was looking for my next chapter. The idea of sourcing debt and tax equity to help capitalize impact projects was very attractive to me. When I started at Foss & Company, I focused on finding third-party construction/mini perm loans to go alongside Foss’s tax equity investments. Foss & Company had become more of a one-stop shop and brought an increased percentage of the capital stack for these tax credit projects. That role grew into sourcing capital for tax equity bridge loans as well as working with large companies to help them invest their tax dollars into tax credit investments.
When did you join Foss & Company and what interested you about the company?
I joined Foss & Company right before COVID in early 2020. I was intrigued by Foss’s deep expertise in the small niche of tax credit investments. Somehow, the Foss team figured out how to efficiently deploy capital from its corporate clients to offset income taxes, achieve nice returns and have a positive impact on social or environmental initiatives for the client. And all of this required very little effort on the part of the client. Foss did all of the project sourcing, due diligence, closing, asset management, investor reporting and disposition. The beauty was that the client did not need much extra bandwidth because Foss did all of the heavy lifting. Another thing that impressed me was that Foss & Company had been around since the ‘80s and had found a way to adapt to the various tax credit incentives over the decades. It made me feel good about joining a team that understood that the world is a dynamic place and had demonstrated the ability to continue to add value for its clients.
What do you find important or interesting about tax credits?
I think tax credits are one of government’s best tools for incentivizing positive investment behavior. By providing tax credit incentives, it allows projects to proceed that might not otherwise be undertaken since the tax credits generate additional capital to help make projects financially feasible. As a result, old historic buildings are repurposed which can have a transformative impact by giving new life to blighted neighborhoods. Also, renewable tax credit incentives are helping accelerate the transition to clean energy through solar and battery storage development. That sure seems important to me!
What is one thing people may not know about tax credits?
The economic returns that companies can achieve from investing in tax credits are high! Where else can you achieve a double-digit after-tax ROI on a well underwritten and high-quality investment? The returns are especially high when you consider that the risks are well mitigated, and the alternative is paying your income taxes to the IRS and achieving a 0% return.
How has the tax credit investing industry evolved and where do you see it going?
In 2022, congress passed the Inflation Reduction Act (IRA) which gave a huge boost to decarbonization and the transition to renewable energy. The IRA made the existing tax credit program more valuable and extended the program for ten years. The certainty that comes from that extension can’t be overstated. Industry developers and investors now know that it is going to be there for an extended time period and can dedicate their resources to project development and investment. The IRA also made stand-alone battery storage projects eligible for tax credits for the first time. These batteries are rechargeable and can store energy from different sources and discharge it when needed most. This new tax credit incentive will drive the increased development of battery storage projects and bring increased efficiency to the energy markets.
Any other insights you would like to add?
It’s an exciting time to be in the tax credit investment business. The tax credit market is growing, Foss & Company is growing, and I am continually inspired by my clients and co-workers. The work we put in and the results we achieve together makes it very satisfying.
Those interested in getting in contact with Kip can contact him at [email protected] or connect with him on LinkedIn.