Besen Foundation Moves into Impact Investing
Wednesday, 6th April 2016 at 10:09 pm
Leading Australian philanthropic fund, the Besen Family Foundation, has moved into impact investing joining with National Australia Bank to support a new fund that wants to raise $100 million to invest in water rights in the Southern Murray-Darling Basin.
The Besen Family Foundation is coordinating with the Nature Conservancy Australia, NAB and a number of other wealthy Australians in advancing the fund.
As Pro Bono Australia News reported late in 2015, the Murray-Darling Basin Balanced Water Fund raised $27 million late last year to buy and lease water rights while protecting culturally significant wetlands that support threatened species in the basin.
The fund now wants to raise a further $75 million from high-net-worth individuals, institutions and superannuation funds.
“The Besen Family Foundation has always applied an ethical screen to its investments to avoid those industries that have a negative impact on society. We see impact investing as an extension of this ethical mandate,” Terry Christofides, Managing Director of Highpoint Property Group Pty Ltd, a related entity to the Besen Family Foundation, told Pro Bono Australia News.
“The move into impact investing is a result of the shared knowledge, experience and enthusiasm of the trustees and the next generation of family members. So we see impact investing as more of an evolution than change in direction for the foundation.
“We have a clear mandate from the trustees to allocate a proportion of our corpus towards impact investing.
“We were attracted to water as an asset for its long-term capital growth, low correlation to other assets and its capacity to generate yield.”
Christofides said introducing water as a new asset class to the foundation balance sheet assisted with improving diversity to its investments and thereby reducing its concentration risk.
In offering advice about moving into impact investing by other philanthropic foundations Christofides had a positive outlook.
“Impact investing does not result in reduced financial returns,” he said.
“Comparable returns are available without compromising the risk/return equation for investing. Patience however is required in finding these investment opportunities as they are less prevalent than the traditional mainstream options.”
The Nature Conservancy’s Australian Country Director, Rich Gilmore, said the philanthropic dollar was becoming very important in being the catalyst to unlocking bigger, private investors as they were able to invest with the due diligence and confidence to help seed impact investing.
“This is the first time in the world where a water fund has been established to achieve the multiple objectives of providing secure water for agriculture, returns to investors and wetland restoration at scale,” Gilmore, said.
“We are delighted to have the Besen Foundation on board along with a number of high profile investors and other philanthropic organisations who have chosen to remain anonymous at this stage.”
The new water fund has been described as the first major social impact investment for conservation in Australia, where investors have sought both economic and social returns.
Gilmore said the Nature Conservancy Australia now had 25 full-time staff working on impact investments through conservation.
“We have dozens of impact investment projects globally and in Australia in the pipeline,” he said.
He said water was a natural opportunity for impact investing because the impact was easily measured.
The Besen Family Foundation was established to build on the philanthropic tradition which was started by Melbourne-based retailing billionaire Marc Besen and his wife Eva.
In the Australia Day honors in 2015 Marc Besen was named a Companion in the General Division of the Order of Australia for his service to the visual and performing arts and contribution to a range of social welfare initiatives.