The Generate KiwiSaver Scheme has made a $13.7 million impact investment in the Te Puna Hapori - Verdi Social Housing Bond. The transaction – structured and managed by Impact Investment firm Brightlight – provides the funding for two new social housing projects, which will house 39 families (at least 78 people) currently living in sub-standard accommodation.
Emerge Aotearoa and the Salvation Army (the lessees) will each lease one of the developments and offer them as safe and affordable housing for families who cannot afford their own homes. The leases are further underpinned by contracts between the lessees and the Ministry of Housing and Urban Development (MHUD).
The deal is a win for both the future housing tenants and members of Generate KiwiSaver Scheme, delivering investors both a sound investment return and social impact. The bond is split into two tranches, each with fixed interest returns over at least 5-years backed by a stable profile of payments from long-term leases.
“Responsible investment is one of our core values at Generate and this investment really ticked all the boxes for us.” said Ayrton Oliver, Generate’s Fixed Income Portfolio Manager.
“The Te Puna Hapori - Verdi Social Housing Bond, allows us to use our investing power to create positive change in our community, while still delivering attractive returns for our members.” he continued.
The Te Puna Hapori - Verdi Social Housing Bond is the first impact investment delivered in New Zealand by Brightlight. Brightlight is an Impact Investment Management firm committed to transforming lives through investments across Australia and New Zealand.
“Brightlight is delighted to partner with Generate to finance the Te Puna Hapori - Verdi Social Housing Bond” said Brightlight Managing Director, Samuel Richards.
“This bond is part of a broader community infrastructure strategy which galvanises capital to help transform lives in the communities of New Zealand. This first bond of many is designed to invest in critical community facilities, particularly in geographies and sectors where there is the need to unlock potential for wellbeing and health.” he added.
Tim Symons, Brightlight’s Community Infrastructure Partnerships Lead explains, “I’m excited to see the Brightlight purpose lived out through this social housing bond and look forward to talking to the tenants in the coming months, to hear how this safe and affordable housing has empowered them and their families.”
Impact Investing is nothing new to Generate. In 2020 Generate was the first KiwiSaver scheme to invest in social housing via a $21m investment into Salvation Army community bonds, which helped build 118 new warm, dry, affordable community houses across three locations.
“Mindful Money welcomes this further investment by Generate in social housing. KiwiSaver has become a main source of retirement income, but it also has the potential to contribute beneficially to New Zealand’s social and environmental outcomes.” says Barry Coates, Founder and CEO of Mindful Money
“It’s good news that KiwiSaver investors have opportunities to contribute to this much-needed housing development managed by reputable community housing providers.” he added.
Generate was also awarded the Outstanding Collaboration Award at the 2021 Sustainable Business Awards, along with Community Finance for their part in The Aotearoa Pledge. The Aotearoa Pledge saw investors from a wide range of sectors come together with the goal of delivering affordable homes, financed by the private sector.