Community Finance Partners with Public Trust as Security Trustee
Last week Generate KiwiSaver, The St Johns College Trust Board and new philanthropic Foundation, Clare, combined to invest $16.9m into an impact investment towards the creation of 118 new houses for families without homes. A total of $34.4m has been drawn down to date with a closing target of $40m.
The Bond is a fixed interest, 5-year, product yielding 2.3% per annum and therefore delivers a better than average return compared to other similar products in the market at present.
Impact investment refers to investments made into companies, organisations, assets and funds with the intention to generate a positive social or environmental impact alongside a financial return.
“We are thrilled to be partnering with Community Finance and supporting positive social and environmental change at a time when New Zealand needs it most,” says Public Trust Chief Executive Glenys Talivai.
“As an organisation that has been proudly protecting Kiwis’ assets for nearly 150 years, this partnership aligns strongly with our core values and we’re excited to see the good that will come from it.”
The Salvation Army Community Bond is the first project by Community Finance, an impact investment platform established in 2019 to catalyse social and environmental change in New Zealand. The platform operates by matching ethical investors with specific projects, in this case social and community housing, and making it easier for organisations to provide impact investments.
Community Finance CEO James Palmer says, “we exist to raise affordable debt on terms that work for those organisations with proven track records who are paving the way for social and environmental change in New Zealand. We act like a bridge between ethical money and great outcomes. We are thrilled to partner with Public Trust to provide a significant additional level of security and assurance for investors”.
This project represents a significant commitment from the Salvation Army to develop new housing on their extensive land holdings in urban centres across the country.
National Director of The Salvation Army Social Housing, Greg Foster, says: “This set of arrangements means more and more families who are currently living in garages, or are bunking down with family members are going to get to live in their own warm, dry and safe home, within a thriving community setting.
We are thrilled for these families, and it will be life changing for them.” With reference to the Bond, Barry Coates, Founder and CEO of Mindful Money says: “This is an example of investment for good – earning a sound return while making warm and healthy homes available to those who need them. Affordable housing was a major challenge before COVID, and now it is even more urgent.”
Te Matapihi GM, Wayne Knox sees huge potential in impact investment for Māori housing initiatives, particularly for Māori CHPs. “I know the Community Finance team are actively engaging with Māori, and look forward to Māori housing projects benefitting from access to low-cost finance”.