Goldman Sachs sees investment opportunity in NYC jail program
| NEW YORK
New York City says Goldman Sachs will invest almost $10 million in a new jail initiative that will allow the investment firm to profit if the program succeeds in reducing recidivism rates.
The New York Times reports that the city will be the first in the nation to test "social impact bonds" that could save governments money over the long term.
The city is to announce Thursday that Goldman will provide a $9.6 million loan to pay for the Rikers Island program. If recidivism drops by 10 percent, the firm would get back the $9.6 million. If it drops even more, it could make as much as $2.1 million in profit. If recidivism doesn't drop by at least 10 percent, Goldman would lose as much as $2.4 million.
