CASE STUDY Social Ventures Australia Social Impact Fund (SIF)
Size of Fund: AUD$9 million THE FUND Founded in 2012, the SVA Social Impact Fund (SIF) was established to provide loans and equity investments to Australian social enterprises. It was originally founded with a seed-funding grant of $4 million from the Australian Government’s Social Enterprise Development and Investment Funds (SEDIF) program, of which Social Ventures Australia was selected as one of three Fund Managers. About the fund In addition to SEDIF, $5 million was contributed by private investors. The SIF provides loan or equity investments of $150,000 - $1,000,000 (potentially higher, assessed on a case by case basis) to Australian social enterprises. Loan terms range from 1 – 5+ years and interest rates are determined depending on risk and indicative cash rate.
About the manager
Social Ventures Australia is a non-profit organisation established in 2002 by The Benevolent Society, The Smith Family, WorkVentures and AMP Foundation. Offering funding, investment, and advice, SVA aims to overcome disadvantage in Australia in key areas such as education, sustainable jobs, stable housing and appropriate health, disability and community services. The SIF portfolio is spread across business operating in wide variety of industries.
Outcome area
The SIF currently invests most heavily in Waste treatment, disposal and remediation services with 26% of capital deployed in this sector. Cleaning (21%), Health (17%), Education and Training (13%, and Construction (12%) are other major areas of investment.
Geography
The SIF invests in social enterprises that are located in Australia and predominantly serving Australian communities.
Scale of impact
The SIF support Australian social enterprises participating in a variety of different industries. The social enterprises supported by the SIF are focused on positive social change including improving education, employment and life outcomes for disadvantaged members of the community.
Investor/s
The fund is constituted from seed funding from the Australian Government under the SEDIF program and private investors. The private investors are all wholesale investors; the register includes HNWI, Foundations, Trusts, SMSF and some institutional investors. STREAT Limited (Loan: $1.25 million)│18 months │approx. 5.56%pa Secured 18-month construction loan investing equally with NAB. The loan was used to fund the construction of the new flagship STREAT café in Cromwell Street, Collingwood which will also serve as the STREAT HQ, bakery and roaster. PGM Refiners Pty Ltd (Equity investment: $1 million)│Redeemable Convertible Preference Shares, fixed coupon rate of 12% (conversion right within the first 5 years) Staged equity investment to expand operations of E-waste recycling business. Core social goal of encouraging employment of disadvantaged job seekers. CoHealth Ltd (Loan: $450,000 ($300,000 deployed) │7 years │8% pa Unsecured 7 year loan to set up a private GP clinic and subsidise services provided by community health care centre to vulnerable members of the community.
Major investments
Asset class
Alternative Assets
Fees
As per the SEDIF Funding Agreement, the Government Grant is used for the payment of fees and expenses of the Fund. As a result private investors are not subject to any fees related to their participation in the SIF.
Liquidity
Redemptions are permitted at the discretion of SVA and the Trustee after the fifth anniversary of the Commencement Date of the Fund (May 2017). Thereafter, SVA and the Trustee may permit annual redemptions subject to a discretionary cap on total redemptions of 15% of Net Asset Value as at the Redemption Date.
THE IMPACT As at 30 June 2015 the SIF had made 9 investments committing a total of $4.99 million in capital and these portfolio businesses were employing 98 people, of which 52 faced significant barriers to employment. Social, cultural or environmental impact
Portfolio businesses all reported individual social impacts. During FY15, some highlights included: Inside the Brick facilitated 3,269 child and adolescent attendees to Brick Club & Causal Play sessions, which support children with Autism Spectrum Disorders and other social development issues PGM Refiners recycled/reused 4,493 tonnes of waste Music Stars serviced 126 schools providing 3,786 students with music tutoring 45 permanent employees were hired by Ability Enterprises, 31 of which came from a minority group or were previously exclude from full-time employment
FINANCIAL RETURNS Financial returns
The distribution for the 12 months to 30 June 2015 was $377,055, a 7.5% return to investors.
MORE INFORMATION Social Ventures Australia
