$30 Million Committed to Australian Impact Investment
Wednesday, 9th September 2015 at 11:11 am
Superannuation fund HESTA has committed $30 million to create an impact investment fund managed by Social Ventures Australia, which is said to be the single largest investment of its kind in Australia to date.
While the industry fund for the health and community services sector is leading the way with its commitment, HESTA is worth $32 billion, and, overall, superannuation funds in Australia have more than $2 trillion under management.
Social Ventures Australia CEO, Rob Koczkar said HESTA’s commitment should encourage other large investors to show similar support.
“We hope to see more institutional investors realise that they can make investments that can both earn a financial return and make a positive social impact,” Koczkar said.
“We expect this to be the first of a number of partnerships that we pull together over the next 12-months, because we would like to have an aggregate pool of capital of $100 million, of which HESTA is really the cornerstone with $30 million, to put towards these opportunities.
“HESTA clearly are leading the way in taking social impact into account as they make their investment choices, but that is a theme that is very much on the mind of all investors and all super funds. I think it’s a very strong commitment by HESTA, but I don’t think they are on their own by any means.”
HESTA’s Chief Investment Officer, Robert Fowler said the fund chose to partner with SVA for their previous success in impact investing.
“We share a strong commitment to growing the impact investing market in Australia and consider the relationship with SVA a significant milestone in building this market, to convert words into meaningful action,” Fowler said.
“HESTA has a specific focus on impact investments in the health and community services sectors, which represent the core of our membership base, and allows us to leverage our organisation’s extensive knowledge of the sector.”
SVA and HESTA designed the dedicated fund, the Social Impact Investment Trust, to allow HESTA to make direct and indirect investments in a range of projects.
“It’s a pool of money we will use for projects that we will identify in the future, but we expect most of it will go into social impact bonds, social and affordable housing transactions and social enterprises,” Koczkar said.
“The social impact bonds are covering a range of things at the moment from homelessness to out of home care, recidivism, reducing offending rates, as well as some chronic health and mental health issues.”
Koczkar said “it could be thousands of people who are supported by this capital” given the achievements of previous SVA projects with less financial support.
The $7 million Newpin social benefit bond has reunited 66 children with their parents over its first two years while delivering strong returns to investors.
With a consortium of investors, including other NFPs and the Government, SVA raised $165 million to fund the buyout of the Goodstart business which serves 75,000 children, 65,000 families, and employs 13,000 staff at 640 centres, and has also been recognised as one of the top 10 innovations in global philanthropy.