Social investment MIS targets community projects
Wednesday, 19 November 2008 1:00pm
Foresters Community Finance has created an investment product that allows people to invest in the non-profit and charity sectors and still draw competitive fixed interest type returns of five to six per cent.
The Community Investment Fund operates like property trust but is structured through a Managed Investment Scheme design, enabling more flexibility when tailoring investment proposals around specific charities, said Peter Ball, Foresters' social investment business manager.
What makes the product unique is it allows investors to help the community sector not just by sharing the income streams they derive from traditional investments, but by investing capital with them directly, said Ball.
"If the purpose of a philanthropic fund is to benefit the community then can a fund that invests in the share market actually achieve this goal?" he said.
The CIF operates by purchasing real property and equipment for selected charities which it then leases back to them. These lease payments contribute to the income return on the fund that has averaged more than 5 per cent annually over the last three years.
Ball said they have already identified $25 million in new projects which they will fund as capital becomes available.
Foresters was formed in 1999 through the merger of several friendly societies that date back as far as 1890 and this involvement with the charity sector gives them expertise finding projects they can structure through various tax and endowment arrangement that are not available to super funds or project finance groups, said Ball.
While the CIF currently only holds $2 million, Foresters is already developing other funds, including a Housing Affordability Fund and a Fair Finance Fund.
Foresters boasts among its directors Cheryl Kernot, former senator and Australian Democrats leader and Labor Party MP.
Alex Dunnin
