POWERED BY MOMENTUM MEDIA
NGS Super invests in social benefit bond
NGS Super has invested $500,000 in Australia's first social benefit bond (SBB) which pays a return based on the achievement of predetermined social outcomes.
The bond was launched by the NSW Government and UnitingCare Burnside in late March with the aim of raising $7 million in private investment by mid-year. The NSW Government said the bond represented an innovative new model of funding, partnering the program with the non-government sector and investors.
It conducted an SBB pilot over 2011-2012 which was positive and saw clients enter a joint development phase in March 2012.
The super fund said its investment into the Newpin SBB represented a new form of financing social services where private capital could advance preventative programs in the country.
The fund's investment will go into the running of the Newpin program, which aims to improve the likelihood that a child returns home rather than to foster care. Newpin operates four centres and plans to open six more in NSW.
NGS Super chief executive Anthony Rodwell-Ball said the investment aligned with the fund's community-based values, making it a natural fit.
"Following the assessment of Newpin SBB's investment criteria and a standard governance review, we are pleased to add this investment option within our defensive alternative assets," he said.
"Not only does it make good financial sense, but our commitment to Australia's first social benefit bond strongly aligns with our members' vocation and interests in supporting the wellbeing of children and families in the community."
Ian Learmonth, executive director of social finance at Social Ventures Australia which has taken a financial advisory role, said support from investors such as NGS Super would allow it to continue to deliver successful family restorations through education and intensive support and assist the over 18,000 children currently in out-of-home care.
"The private capital generated by the social benefit bond will help expand Newpin's operations and bring these services to more communities across the state," he said.
"It's an exciting new model of funding for community services, which we hope to expand in the future."
The restoration rate of children who enter the program represents the key performance indicator which is used to calculate an interest rate and repayment obligations of the SBB.
The investment is expected to achieve a 10-12 per cent targeted financial return over the course of the seven-year bond.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
