Investment Profile: Infradebt Ethical Infrastructure Debt Fund
What is this investment? How is Future Super invested?
The Infradebt Ethical Fund (IEF) is an ethically screened private debt infrastructure fund, in which Future Super has a sizeable investment. IEF is focused on financing infrastructure projects that make a positive and sustainable difference to society. That includes things like hospitals, renewable energy projects and schools
Future Super has increased our investment in the Infradebt Ethical Fund on a number of occasions as more opportunities to be involved in creating systems change have become available.
Why did Future Super choose to invest?
This particular fund has a negative and positive screening process similar to Future Super’s process. Infradebt Ethical Fund will not invest in fossil fuels, gas or oil infrastructure. Instead, it looks to invest in renewables, green buildings and other infrastructure that provides public good or societal benefits, such as hospitals, convention centres or research centres.
From an investment point of view, it offers superior risk-adjusted potential returns and directly invests in more long-term parts of the market. In doing so it earns a “liquidity premium”. Another way of thinking about that is that investors earn an extra return for locking away their money for a period of time. Financing investments, which target broad systems change for environmental and social impact, is well suited to a superannuation product like Future Super that offers both financial and impactful benefits.
What makes it unique or impactful?
Infradebt Ethical Fund is Australia’s first ethically screened private debt infrastructure fund. In simple terms, that means it’s a fund made up of private investors, which lends money to private companies in order to finance projects approved by the fund. The nature of the fund means that the recipients of the loans are ethically screened for harmful activity and evaluated for the positive impact they can have on society.
Want more information?
If you want to learn more about Infradebt Ethical Fund, head to their website to learn more.