Social Benefit Bond Raises $7M
4 June 2013 at 10:13 am
Not for Profit organisation, Social Ventures Australia has raised $7 million for Australia’s first social benefit bond – well ahead of schedule.
Social Ventures Australia (SVA) says due to strong interest from a broad range of high net worth, institutional and other investors there was an early close of applications to the first social benefit bond (SBB).
Social Ventures Australia (SVA) was established in 2002 by The Benevolent Society, The Smith Family, WorkVentures and AMP Foundation to build sustainability in the social sector.It says the offer, which was oversubscribed, closed a month earlier than scheduled.
The private capital raised will fund UnitingCare Burnside’s Newpin program, which works with families to safely return children from foster care and reduces the number of children placed in out-of-home care.
“This is a huge vote of confidence by the investment and social policy sectors in Australia’s first social benefit bond,” NSW Treasurer Mike Baird said.
“It demonstrates how this innovative approach towards the funding of social programs can provide value for investors.
“I’m confident the Newpin bond will also demonstrate how social benefit bonds can improve the lives of vulnerable people while providing cost savings for the State. I congratulate Social Ventures Australia, and UnitingCare Burnside, on the initial success of the Newpin bond.
“The Government will look at further opportunities to direct private sector resources towards positive social outcomes,” Baird said.
Social benefit bonds are an innovative financing tool enabling investors to earn a return on their investment based on the achievement of agreed social outcomes. Under an SBB, investors fund the delivery of services targeted at improving a particular social outcome reducing the need for government spending on acute services.
“As experts in impact investing, SVA was appointed as advisor and manager of the Newpin SBB and to lead its structuring and fundraising,” Executive Director, SVA Impact Investing, Ian Learmonth said.
“SVA has worked closely with the NSW Government and UnitingCare to create an appealing investment model, with measurable financial and social outcomes.
“SVA marketed the Newpin SBB through its extensive network of private and institutional investors, who have responded enthusiastically to the unique mix of commercial returns and social benefits it offers.
“We are delighted at the high level of demand from a broad range of investors. The Newpin SBB offers competitive financial returns to investors while also improving the lives of hundreds of Australian children and their families,” Learmonth said.
“We have had an overwhelming response and as a result have closed the bond to new applications a month early. The success of this inaugural project also gives us great confidence in other similar projects we are currently working on.”
SVA CEO Michael Traill AM, said SVA is at the forefront of investing in social change to create better futures for disadvantaged Australians.
“The Newpin SBB is another example of the way big picture thinking and innovative financial models can bring much needed new capital to the social sector.”
The Newpin SBB is the most recent impact investing initiative launched by SVA. SVA was also a partner in the $165 million Not for Profit consortium buy-out of the ABC Learning Centres by Goodstart Early Learning.
Goodstart oversees 15 per cent of early childhood care places nationally and is run with business disciplines for social purpose. SVA also manages an $8.6m impact investment fund which provides financial support to grow social enterprises across Australia.