Social Ventures Australia’s newest impact investment fund has secured more than $10 million in commitments within months of applications opening in September, highlighting the rapid growth of socially-conscious investing in Australia.
Beginning in early 2018, SVA’s new Diversified Impact Fund (DIF) will make 10 to 15 debt and equity investments of between $500,000 and $1.5 million each in a range of social enterprises, along with access to expertise and hands-on support.
While the DIF has now reached its minimum size, SVA remains open to securing an additional $3 million before its final close in early 2018.
Over the next decade, SVA will invest the funds in social enterprises that have achieved revenue and are ready to scale, with a focus on assisting disadvantaged Australians in areas such as education, employment, housing, Indigenous communities, disability and health.
Investors in the fund include the Myer Family Foundation, the Benevolent Society Endowment, AMP Foundation, Julian Harris Family Foundation, Trawalla Foundation and the Bryan Family Foundation, along with around 40 other trusts, foundations and high net worth individuals.
The DIF is the first Australian impact investment fund to include downside protection, meaning that investor losses will be limited in the event the fund ends up losing money.
In a statement, SVA Impact Investing executive director Michael Lynch said the fundraising process has highlighted a significant shift in the way impact investing is viewed in Australia.
“Impact investing is now being taken seriously as a way to generate social outcomes without taking a haircut on financial returns,” Lynch says.
“We’ve already doubled the amount we raised for our first impact fund, since it was almost half funded by government. And we’re hoping to triple it by final close early next year.”
The DIF supersedes SVA’s earlier Social Impact Fund (SIF), which was created in 2012 with a seed funding grant from the federal government, matched by funds from private investors.
The SIF achieved a 7% rate of return per year, while creating over 160 jobs and 22 dwellings for disadvantaged Australians over its five-year term.