A new investment vehicle designed by the Federal Deposit Insurance Corp. will let financial institutions and other organizations provide capital to insured minority depository institutions (MDIs) and community development financial institutions (CDFIs) that will then request funding through a “pitch process.”

The FDIC today launched the Mission-Driven Bank Fund to channel private capital and other resources to MDIs and CDFIs, “allowing them to amplify the impact of investments in the communities they serve,” the FDIC said in a statement

While the FDIC designed the fund and will have an advisory role to support its mission, the agency will not provide capital or have a say in how the funds are invested.

Instead, the fund will be led by two anchor investors: North Carolina-based Truist Financial Corp. and Microsoft. Media company Discovery Inc. will join as a founding investor, and these three companies have made an initial funding commitment of $120 million. The FDIC said additional funding could come from financial institutions, corporations, philanthropic organizations and other investors.

“Microsoft and Truist have answered the call to become anchor investors and to assist the FDIC in developing this Fund for the benefit of mission-driven banks and, most importantly, the people and places these institutions serve,” FDIC Chairman Jelena McWilliams said in the statement. “It is our hope that with the commitment of these industry leaders, more private equity investors will join the growing ranks of those committed to building opportunity and prosperity where this support is needed the most.”

The FDIC said it designed the fund’s framework with the assistance of approximately 70 MDI and CDFI CEOs and their trade groups, as well as potential investors, investment consultants and philanthropic organizations. The FDIC said the creation of the fund supports its “commitment to preserving and promoting mission-driven banks.”

“The partnership with Microsoft and the FDIC, as an anchor investor in the Mission-Driven Bank Fund, is a direct investment in advancing our purpose to inspire and build better lives and communities,” Truist CEO William H. Rogers Jr. said in the statement. “MDIs and CDFIs play crucial roles serving the needs of minority and rural neighborhoods, and Truist has an established history of partnering with these organizations. We’re extending this commitment through an innovative approach to capital investments and we believe this will significantly enhance these institutions’ ability to provide positive outcomes for our communities.”

The capital provided to MDIs and CDFIs will allow them to provide affordable financial products and services to individuals and businesses, stimulate economic and community development, and build opportunity and prosperity, the FDIC said.

To be considered for funds from the vehicle, FDIC-insured MDIs and CDFIs will submit pitches for investments in a variety of asset classes that will help the institutions “build size, scale, and capacity to grow their impact in communities,” the FDIC said in a summary of the new vehicle.

“The pitch process empowers FDIC-insured MDIs and CDFIs to seek support for their unique needs and to demonstrate how the investments will support minority, low- or moderate-income, or rural communities,” the FDIC said in a summary of the new vehicle.

The FDIC said the fund will target a minimum rate of return for investors, who will be able to reinvest returns in the fund or in nonprofit organizations that support the work of the MDIs and CDFIs.

The FDIC said Truist and Microsoft will hire a fund manager in the fourth quarter, with the pitch process beginning in early 2022. An investment committee will meet quarterly to review pitches.