Social Ventures Australia (SVA) announces the early close of applications to Australia’s first social benefit bond (SBB) with $7 million raised following strong interest from a broad range of high net worth, institutional and other investors. The offer, which was oversubscribed, closed a month earlier than scheduled. The private capital raised will fund UnitingCare Burnside’s Newpin program, which works with families to safely return children from foster care and reduces the number of children placed in out-of-home care.
NSW Treasurer Mike Baird commented “This is a huge vote of confidence by the investment and social policy sectors in Australia’s first social benefit bond. It demonstrates how this innovative approach towards the funding of social programs can provide value for investors. I’m confident the Newpin bond will also demonstrate how social benefit bonds can improve the lives of vulnerable people while providing cost savings for the State. I congratulate Social Ventures Australia, and UnitingCare Burnside, on the initial success of the Newpin bond. Most important, I look forward to hearing about the struggling families that have been reunited as a result of this program. Newpin is just the beginning. The Government will look at further opportunities to direct private sector resources towards positive social outcomes.”
The Hon. Mike Baird, MP speaks about the potential of Australia’s first Social Benefit Bond.
Social benefit bonds are an innovative financing tool enabling investors to earn a return on their investment based on the achievement of agreed social outcomes. Under an SBB, investors fund the delivery of services targeted at improving a particular social outcome reducing the need for government spending on acute services.
As experts in impact investing, SVA was appointed as advisor and manager of the Newpin SBB and to lead its structuring and fundraising. SVA has worked closely with the NSW Government and UnitingCare to create an appealing investment model, with measurable financial and social outcomes. SVA marketed the Newpin SBB through its extensive network of private and institutional investors, who have responded enthusiastically to the unique mix of commercial returns and social benefits it offers.
Ian Learmonth, Executive Director, SVA Impact Investing said “We are delighted at the high level of demand from a broad range of investors. The Newpin SBB offers competitive financial returns to investors while also improving the lives of hundreds of Australian children and their families. We have had an overwhelming response and as a result have closed the bond to new applications a month early. The success of this inaugural project also gives us great confidence in other similar projects we are currently working on.”
Michael Traill AM, Chief Executive, SVA commented “SVA is at the forefront of investing in social change to create better futures for disadvantaged Australians. The Newpin SBB is another example of the way big picture thinking and innovative financial models can bring much needed new capital to the social sector. We congratulate the NSW Government and UnitingCare for leading the way, and are thrilled that SVA has been able to play a pivotal role in the success of this fundraising.”
The Newpin SBB is the most recent impact investing initiative launched by SVA. SVA was a partner in the successful $165 million non-profit consortium buy out of the ABC Learning Centres by Goodstart Early Learning. Goodstart oversees 15% of early childhood care places nationally and is run with business disciplines for social purpose. SVA also manages an $8.6m impact investment fund which provides financial support to grow social enterprises across Australia.