HOPE Housing Fund Management Ltd (HOPE), the co-investment fund manager supporting essential workers to buy their own homes, has received an Australia-first rating from research and managed fund ratings house Evergreen Ratings.
HOPE is the first ever shared equity residential property fund in Australia to obtain this rating, receiving a ‘satisfactory’ evaluation from Evergreen’s assessment of the fund and the manager’s capacity to operate and meet its investment objectives of a 10% return for investors.
HOPE Chief Executive Officer, Tim Buskens, said the rating is a welcome recognition and great outcome for a new fund with limited track record, and that a satisfactory rating was expected for a fund that is pioneering a new form of social impact investing.
“This strong result shows the shared equity model we have pioneered at HOPE is a win for both homeowners and investors. To be the first fund of its kind to receive a rating from Evergreen reflects HOPE’s innovative asset valuation solution and asset selection process,” Buskens said.
“HOPE is a demonstrated and workable solution to the housing affordability crisis facing essential workers – and potentially other middle-income workers who are being forgotten by existing government and private schemes – allowing essential workers to buy a home of their choosing while also protecting and growing the interests of investors.”
Evergreen’s independent analysis saw strengths in the HOPE fund through its access to demonstrable social impact investing, ability to create access to an asset class not typically available to investors at scale, and significant input to substantial investment decisions by the Investor Advisory Committee.
Evergreen Director and Founder, Angela Ashton, said she is pleased to have provided HOPE Housing with its first Fund rating. “Evergreen’s independent analysis highlights HOPE’s robust asset valuation solution, strategic asset selection process, and the notable social impact it creates. This rating affirms HOPE’s position as a leader in social impact investing, providing investors with access to capital growth and diversification benefits in the residential property market,” Ashton said.
The evaluation commended how the HOPE fund enables investors to gain exposure to the capital growth associated with the residential property market, and capture diversification benefits from an asset class conventionally uncorrelated to standard asset classes.
Through careful asset selection, investors in HOPE’s fund can unlock access to potentially superior residential returns, as opposed to traditional property investing.
According to CoreLogic’s most recent national overview of residential properties sold for a nominal loss or gain, returns on owner-occupier properties have seen a ‘far greater rate of profitability than investors’ through not only the September 2023 quarter but in the quarters prior.
HOPE represents a new way of investing in owner-occupied residential real estate, solving a critical social problem at the same time.
The HOPE model was launched in response to mounting evidence that workers who provide critical public services in Sydney and Melbourne are struggling to afford to buy a home near to where they work.
The HOPE fund co-invests with essential workers in well located, owner-occupied homes, receiving a proportional share of the capital growth in the asset. The fund pays distributions to investors when a property as the homeowner progressively buys out part or all of HOPE’s share.
