HESTA jumps on new investment to broaden Australia’s impact investing market
7 December 2020 at 6:09 pm
The new fund invites retail investors to invest in social impact alongside large institutional investors
A new capital source for the for-purpose sector is set to kick off, following HESTA’s $20 million commitment in Australia’s first Mutual Capital Instruments fund.
The launch of Australian Unity’s $100 million ASX-listed Mutual Capital Instruments (MCI) will allow retail investors to invest for social impact alongside large institutional investors, opening up potential to expand Australia’s impact investing market.
MCIs are financial instruments created exclusively for mutual entities. They represent potential new source of capital for the $104.4 billion co-operative and mutual enterprise (CME) sector, which was previously reliant on retained profits to expand their operations.
Legislative change in 2019 saw mutuals officially recognised in the Corporations Act, giving them greater access to capital raising mechanisms.
HESTA has made the investment through its $90 million Social Impact Investment Trust, managed by Social Ventures Australia (SVA).
Rebecca Thomas, the executive director of impact investing at SVA, said the issuance of Australia’s first MCI was a unique opportunity for retail and institutional investors to invest in a large organisation such as Australian Unity.
“Bringing this MCI to market with an organisation with the expertise and deep community links of Australian Unity provides the potential for the development of an entirely new social impact investment product that’s available to both small and large investors alike,” Thomas said.
“The success of this raising could see a pipeline of similar issuances, with the potential to drive the growth of larger scale social impact-focused organisations within the mutual market.”
HESTA CEO Debby Blakey said the superfund saw the opportunity as a chance to invest in the fast-growing “care” economy that Australian Unity supported.
“As patient, long-term investors we see an exciting opportunity to invest in the fast-growing ‘care’ economy that can generate strong returns for HESTA members while helping to create growth and jobs in the industries where they work,” Blakey said.
“Investing in the health and community services sector will also support a faster, higher-quality COVID recovery and the long-term resilience of our economy.”