Australia is ready for a more sophisticated market in impact investing according to Michael Traill, who has spent almost two decades encouraging Australians to invest for profit — and good.
As the chair of the federal government’s task force on social impact investing — investment measured by both financial returns and success in a social objective — Traill argues the nation needs to scale up for a potential $60bn market by setting up a “wholesaler” to bring deals to potential investors.
The task force has just presented its final report to the government and while its recommendations are still under wraps, Traill tells The Deal the group has identified the need to develop the “architecture” of the market to offer more products to investors such as superannuation funds, foundations, philanthropists and those prepared to accept a “below conventional risk return”.
“I think there is an appetite for larger scale impact investing,” he says. “There’s been an evolution and a set of developments over the last decade that would suggest that this market is ready for that but it would need some encouragement and stimulation for that to happen.” Till now most investments of this sort in Australia are about $50,000 to $10m but Traill sees potential for a spread of investments with up to $50m at the top end.
He says some industry superannuation funds, such as HESTA, have been proactive, showing financial returns consistent with the “sole purpose test” which directs funds to invest only for the retirement benefit of members.
The task force, set up in the 2019 federal budget to investigate the role the commonwealth should play in developing investment to “provide solutions to address entrenched disadvantage and some of society’s most intractable social problems” released an interim report last December. It identified three existing segments — social impact bonds which provide start-up funds for potential future return; the approximately 20,000 social enterprises of small to medium size with less than $10m turnover; and large scale enterprises of which only about six have an annual turnover of more than $50m. The interim report flagged the need for an early stage foundation; a body to promote more “outcome-based” funding opportunities; and a wholesale fund similar to Big Society Capital in Britain. The latter, it said, was “critical” for growing the sector.
Big Society Capital, was set up in 2012 as a £400m ($727m) fund to support and co-invest with fund managers to invest in social enterprises. It has since signed £540m of investment and attracted more than £1.2bn of coinvestments.
In an interview with The Deal, Traill emphasises that if the market is to scale up, Australia will need impact investment “wholesalers” to operate as intermediaries in the same way as fund managers operate in investment generally. Such a body would also attract people who could “talk a tripartite language” of business, social performance and community, and government. “A lot of the impacting investing space — think social housing, think aged care, early learning, NDIS — has an element of understanding of government policy funding and engagement,” Traill says.
“It becomes a virtuous circle. If you can set up funds that have $40m to $50m in them rather than $5m to $10m, by definition it is easier to hire (top talent).”
The task force found that high net worth funders, foundations and super funds which are already investing in social projects are often hungry for more products. They were saying “we would like to do more, we’ve been quite happy with the financial returns, the visibility of social impact, but we’d like to actually do three to five times the amount of what we are doing”.
“The question is then, how you develop more products?” Traill says. “We think that the answer is to set up the kind of partnerships that support the sustained development of intermediaries ethical fund managers who can originate these opportunities and transactions.” But he says the fragmented market will need support across all three segments from the earliest stage seed funding to mid-sized social enterprises to larger scale projects. This is needed in order to build skills for the bigger projects.
Traill left investment bank Macquarie 20 years ago to become founding chief executive of Social Ventures Australia. Back then the focus was on “venture philanthropy” and the use of performance metrics to bring venture capital disciplines to philanthropy without demanding a return on investment. “What has happened over the 20 years since is a much more sophisticated understanding that there will be opportunities to mobilise even bigger chunks of capital where you can combine reasonable financial returns and social purpose,” says Traill.
At present impact investing totals about $1bn in Australia but Traill suggests it could grow to 2 per cent of the overall local investment market of about $3 trillion. “I don’t think that’s a naive or aspirational target... 2 per cent is still mobilising massive pools of money. It could be a $60bn market. But to get to that point you would want it to be recognised as a mainstream asset class in the same way as private equity or infrastructure or direct property.”
Traill says super funds are interested in investments of $20m to $50m and above. That means they need projects of between $50m to $100m and above. “That is actually a big chunk of the market when you think about aged care, you think about TAFE and further education, early learning childcare, social and affordable housing,” he says. “The NDIS housing (for example) has been effective in encouraging funding into that market. These are clearly multibillion-dollar chunks of the economy.
“Wind the clock forward five or 10 years and I think there will be a very broad church of impact investors. The super funds have to provide reasonable long-dated financial returns and I think there is a transaction opportunity there that will appeal to them. “I think that will be a big market and then you’ll have a spectrum of impact investment that draws on the original pool of foundations, philanthropists and investors who want to generate a return but may be prepared to accept a ‘below conventional risk return’. And that’s already happening.”
The British system was boosted by using “unclaimed monies” and Sir Ronald Cohen, the force behind its establishment, has suggested Australia make similar use of so-called passive funds. But Traill says there are legislative and technical problems in “liberating” these funds in Australia, and the task force has not recommended that idea. Nor is it pushing legislative change to help Australia scale up the sector.
“We think it is much more about government encouragement and enabling,” says Traill. He says the final report addresses two other issues that have held back development of the sector — the need for capacity building for early stage social entrepreneurs who need resources; and “a very specific gap which we came to know as the valley of debt funding”. This refers to the problems faced by a social enterprise which is up and running but is too small to access the next tranche of capital — often between $25,000 to $150,000 — to allow it to grow to the next level.
Full article via The Australian
HELEN TRINCA, THE DEAL EDITOR AND ASSOCIATE EDITOR Helen Trinca is a highly experienced reporter, commentator and editor with a special interest in workplace and broad cultural issues.
For Purpose Investment Partners is providing ~$7m financing, delivering peace of mind for eight NDIS participants and their families on Sydney's northern beaches
19 August 2025 - For Purpose Investment Partners (FPIP) has provided ~$7m in long-term mezzanine debt financing to support eight NDIS participants in their 'forever homes' at the Beacon Hill Disability Housing project on Sydney's northern beaches.
The financing follows the successful repayment of the project's $4 million construction debt and ensures the continued provision of safe, secure and purpose-built accommodation for residents with high support needs. The pilot project, established in partnership with the Sustainable Development Group (SDG) and Sydney Anglican Property, was completed in late 2024. Together, we transformed underutilised church-owned land into vital social housing infrastructure by providing Specialist Disability Accommodation (SDA).
"This long-term financing provides stability and certainty for the eight residents who call this place home," said Tim Shaw, Executive Director of FPIP. "Our partnership with Sydney Anglican Property shows how shared values and patient capital can create meaningful social impact. We're establishing a financial foundation that enables these residents to flourish in their community with the comprehensive support they deserve."
The Beacon Hill project exemplifies how purpose-driven investment can address critical housing shortages while supporting vulnerable Australians. The development provides high-quality, accessible homes designed for people with disability support needs.
"The Anglican Church is committed to using our land assets to serve the community and support those most in need," said Ross Jones, CEO of Sydney Anglican Property. "This partnership with FPIP has transformed unused church land into a lasting social asset that provides secure, dignified housing for the tenants. The successful refinancing ensures these residents have the certainty of a permanent home, while their families have peace of mind knowing their loved ones are well-supported.”
Evolve Housing manages the SDA property, while Fighting Chance provides Supported Independent Living (SIL) services. Together, they deliver comprehensive support that enables tenants to live independently in their community.
The project builds on FPIP's impact investment approach to drive sustainable financial returns alongside measurable social outcomes. We continue to work with mission-aligned partners to expand access to quality housing across Australia, including SDA and Social and Affordable Housing.
Australia's superannuation system, projected to reach $9 trillion by 2040, represents an unprecedented opportunity to mobilise patient capital for social infrastructure that delivers both institutional grade returns and essential community services. The Economic Reform Roundtable presents a defining moment to unlock this pool of capital through proven investment models that align financial performance with measurable social outcomes. At For Purpose Investment Partners (FPIP), founded by Michael Traill AM, we have demonstrated that ethical, long-term investment in aged care, disability services, and education is delivering both financial and social value without compromise.
The Economic Reform Roundtable represents Australia's moment to lead. By aligning our world-leading superannuation system with proven impact investment models, we can demonstrate that superior financial returns and transformative social outcomes are not competing objectives - they are the twin engines of sustainable economic growth.
Read our full submission to the Economic Reform Roundtable, which includes our five recommendations to reform the economy through social impact investment.
For Purpose Investment Partners founding Chair Don Luke has confirmed his planned retirement from the board will take effect at the end of June 2025. As the founding Chair, Don has been instrumental in shaping the direction, growth and guiding values of For Purpose.
Executive Director Michael Traill AM said "Don has brought passion, a practical and insightful depth of experience in all the things that matter to us at For Purpose and a deep belief in our mission and cause. His generosity of spirit and engagement has been fundamental from the outset. We would quite simply not be in the position of having a broad-based portfolio of investments in the sectors we wanted to make a difference in, with the potential to take the next leap of funding and growth to the institutional market, without his presence and guidance.
"Don’s unique background and perspective in having been a founding CEO at Sun Super through to his role of Chair at Australian Retirement Trust, and an impactful 5-year stint as CEO of Anglicare Queensland, speak to the heart of who he is; his thoughtful and measured approach has been significant to how we think about the world. I am deeply grateful for the experience and insight Don’s leadership has provided for myself and our team, and for the high standards he set in how we thoughtfully approach discussions and decisions."
Chair Don Luke said “It has been an enormous privilege to be the founding Chair of For Purpose and be part of establishing an organisation that is truly unique in its mission to combine the best of business and for-purpose thinking to create positive impact in social sectors. It has been an honour and a professional pleasure to work with the board and the management team.”
Don will continue to be involved in providing feedback and advisory support to For Purpose, a measure of his ongoing dedication to our mission of creating both financial value and social impact without compromise. Michael Traill will be stepping in as Executive Chair.
For Purpose Investment Partners acknowledges and pays respect to the past, present and future Traditional Custodians and Elders of this nation and the continuation of cultural, spiritual and educational practices of Aboriginal and Torres Strait Islander people.
We believe that diversity, equity and inclusion at For Purpose Investment Partners are critical in our efforts to create significant social impact. Diversity in the team allows us to better represent the diversity of thought and experiences of the communities that we are aiming to serve, promotes a healthy and thriving working environment, and delivers innovative and sustainable outcomes for our communities, our people, our investors and our partners.
