Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Australian Retirement Trust, QIC go big on affordable housing
Australian Retirement Trust (ART) has partnered with QIC to finance new social and affordable housing supply in Queensland. Up to 1200 homes will be delivered by the partnership, with construction to commence on all projects by 2025. The deal is ART’s first “social issue-focused” investment since the merger between Sunsuper and QSuper.
“ART is proud to be involved in such an important investment to help develop more social and affordable housing across Queensland,” said ART head of sustainable investment Nicole Bradford.
“As one of Australia’s largest superannuation funds, we’re committed to helping solve problems for our community and society, while not compromising on our fiduciary duty to our members, and this project is one example of that. We believe this investment opportunity will support more affordable housing in Queensland, while also maximising the real, long-term investment returns for our more than two million members.”
ART intends to invest up to $150 million for a subordinated debt tranches, with QIC as investment manager. The first two projects to commence will be located in Chermside and Redcliffe, with residents able to move in during 2024.
“QIC is proud to be involved in an industry-driven, human-centred response to Queensland’s current housing issues,” said QIC managing director of real estate Michael O’Brien (photo at top).
“This unique partnership between Australian Retirement Trust, the Queensland Government and QIC, together with Brisbane Housing Company, has created a significant opportunity for institutional investment into social and affordable housing in Queensland.”
The partnership will work in conjunction with Brisbane Housing Company (BCH) to provide a “scalable model for the financing, development and operation of social and affordable housing in the state.”
“This program is an exemplar of how state governments and institutional investors can work together with the community housing sector to raise capital and deliver social and affordable housing at scale,” said BHC CEO Rebecca Oelkers. “It will change the lives of countless Queenslanders who are in dire housing need.”
