Koda Capital CEO Paul Heath said the market for social impact investing is in its infancy and demand from private investors is growing dramatically.
“It is the most powerful theme I have witnessed in my career,” said Mr Heath.
“Demand drivers are a broader level of social consciousness, which is intrinsically linked to intergenerational wealth transfer, and more charity business directors recognizing that they need to deploy money in a way that reflects social good. “
Challenges for investors in the space include the lack of investment fund history given that the market is new, and the emphasis on private markets, where investments are smaller and less liquid, which makes it difficult to verify the value of the assets in which they invest.
Mr Thorburn, who chairs Catalyst Education, which For Purpose supported prior to the latest fundraiser, said he is creating a network of investment managers with expertise in areas such as real estate and people care. elderly. The former NAB boss will seek to join the board of directors of the portfolio companies.
“We have a long list of people who would be candidates for any business we are looking to acquire,” said Thorburn.
Mr Traill said investors were getting “their feet in the water” and needed to make follow-on investments as the track record was established.
Super targeted industry
“The constant message from the private client market is that we are interested in impact investing and want to invest for a relatively small amount initially, but we would like to develop that and do more with our portfolios in this space,” did he declare.
“We continue to be confident in creating a proof point to attract superannuation fund investment in the next iteration of this market.”
Industry super funds Hesta and First State are investment partners and will receive the first right of refusal on new trades as For Purpose tries to encourage co-investment.
The first investment of the new fund is a start-up agreement for BlueCHP, a non-profit organization that works in housing for people with disabilities. The fund will take 10 per dollar from investors to invest $ 6 million in the business in the first quarter of this year to acquire a completed house and three development sites.
He is examining another agreement in the elderly care sector involving the sale of four facilities, and examining other agreements in social and affordable housing, notably with the National Housing Finance and Investment Corporation.
The fund has a longer time horizon than traditional private equity. The investment is locked in for 10 years, although returns will be generated and paid out along the way. Catalyst paid 12 percent.
“We want to run businesses ethically and for the long term, and we are confident that if we do it right and equip ourselves carefully, we can pay a high return,” said Traill.