The Ramsay Foundation and Melbourne-based Conscious Investment Management have teamed up to invest $48 million into disability accommodation, a specialist housing sector which is gaining scale through the increasing attention from institutional players and family offices.
Playing a key role in bringing the deal together is social impact investment house For Purpose Investment Partners, co-founded by prominent venture capitalist Mark Carnegie and Michael Traill. Former National Australia Bank boss Andrew Thorburn joined the outfit earlier this year as well.
On the receiving end is Summer Housing, an early mover in the emerging sector, which will direct the funds into 60 specialist disability units.
"By investing in disability housing alongside Summer Housing, we can significantly improve our residents’ quality of lives," said Conscious Investment's Matthew Tominc.
"We hope to grow this partnership to continue to help address the acute accommodation under-supply for people living with disability."
The commitments from Ramsay and CIM's Impact Fund – former Swisse boss Radek Sali is one of several family office investors backing the fund – will help fund the creation of purpose-built apartments across a number of developments under way in Melbourne Adelaide and Brisbane.
Already Summer Housing has raised more than $300 million from a variety of sources, with 370 dwellings financed. Institutional investors are moving into the sector: Macquarie is among the early birds along with boutique investment house Lighthouse Infrastructure.The housing is specially developed for people living with a disability, with rental streams backed by the National Disability Insurance Scheme. Industry forecasts are expecting the creation of a $5 billion asset class.
There is a large unmet demand. Some 28,000 people – around 6 per cent of those who fall under the NDIS – will require the specialist housing. Taking into account existing facilities, it is estimated new dwellings will be required to accommodate 12,300 participants in the scheme.
So far some 980 new or refurbished SDA dwellings have been created, with a little more than 4000 dwellings enrolled in the scheme. When fully exercised, the housing scheme payments are expected to total $750 million annually, with just 20 per cent of that being paid out so far.
Summer Housing chief executive chief Dan McLennan pointed out the particularly grim situation for more than 5000 people, all under the age of 65, who are forced to live in nursing homes because there are no other appropriate housing options.
The freshly minted agreement with the impact investment consortium would give at least some of those people "the choice to live on their own, or with someone of their choosing, with independence and with the ability to fully participate in the community", Mr Mclennan said.
While Summer Housing's effort has so far been focused within existing larger apartment projects in capital cities, it is keen to extend that.
"How can we come up with scalable solutions that enable institutional capital to be applied toward creating housing not just in capital cities but throughout the whole of Australia. It is a problem that isn’t confined to our cities," Mr McLennan told The Australian Financial Review.
"We’ve got a long way to go in terms of existing pipeline and the market itself still has a lot of scope for growth. I think every institutional investor we’ve engaged with has appetite for significant scale in the market. They are keen for the production of opportunities to finance."
Article via The Australian Financial Review: https://www.afr.com/property/residential/powerbrokers-make-impact-in-disability-accommodation-20200817-p55miz
The new Labor Government has not yet responded to the Social Impact Investing Taskforce's report, but as the AFR indicates, there are high hopes the Albanese Government will be attracted to its suggestions for policy reform, including the creation of a “social investing wholesaler” to direct and coordinate investment.
Our Executive Director Michael Traill, who chaired the taskforce, said government could help to “catalyse and crowd-in more funding” for social impact investing.
Read the full article here.
Our very own Michael Traill sat down with Alberto Lidji for a discussion on social investing in Australia, as part of the Do One Better Podcast.
The episode explores a range of topics including:
(1) An overview of philanthropy in Australia today.
(2) Going beyond grant-making and ensuring endowments are invested for impact.
(3) Do investment professionals genuinely value impact investing?
(4) How does a non-profit, impact investment manager actually work?
(5) How do you go about deal flow origination, and what does a deal look like?
(6) How do you go to market with an impact investment proposition?
(7) How will the impact investing market evolve in the coming years?
(8) Do most impact investment opportunities arise from private equity houses, philanthropic foundations, high net worth individuals, or elsewhere?
Former National Australia Bank boss Andrew Thorburn has re-emerged, joining a new originator and investor in deals to manage human services.
The new group, For Purpose Investment Partners, will seek to bring superannuation funding and corporate management skills into the aged care, mental health, disability, social housing and education sectors..
Our Social Impact Fund I will open to new investors shortly, following a successful first close of $67m in December 2021.
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