Te Puna Hapori Strategy
How is JEDI defined?
The genesis of the product is a Community Trust in New Zealand. Through them, Brightlight learned that a lot of smaller community projects and infrastructure lacked funding: they're too small for capital markets, and don't tick all the boxes for banks. Furthermore, in the New Zealand context, race is not viewed as an issue from a broader community perspective. But Maori communities definitely feel there's been a high level of racial discrimination.
This acknowledgement is fundamental to the creation and implementation of this radically inclusive community infrastructure strategy that aims to address historical explicit and implicit exclusion. The community maintains 100% ownership, and Brightlight provides flexible debt on top of that. This ensures they are always co-investing with the community, and the infrastructure being built always belongs to the community.
Strategy development
Understand historical context: the Treaty of Waitangi is fundamental here, because it forms the foundation of how the outcomes are delivered for beneficiaries. When the Europeans came to New Zealand in the 1800s, they signed the Treaty of Waitangi to collaborate with the Maori, build a nation together and share resources. From a Maori perspective, the spirit of that treaty hasn’t been upheld. Even though it's not said explicitly, the Maori feel that throughout the years, there's been racial discrimination. And so Brightlight felt that in order to build this product, they needed to use the Treaty principles as the basis for how they approach impact. Because of this underlying historical racial discrimination (even if it’s not called that), most of the areas of deprivation are where most of the Maori people live, and that gave Brightlight specific geographic focus. Through a series of community dialogues led by key Maori leaders, they also discovered that women’s leadership was prominent in a lot of pipeline opportunities. This led to greater opportunity to support women’s empowerment and the intersection between JEDI and gender lens investing.
What aspects of the approach could be scaled or replicated?
Partnerships: Rather than starting with investor needs, talking to community elders, non-profit organisations, local government leaders, and others ensured a rigorous community-led approach. Also, the Community Trust has been providing some blended finance structuring to optimise the risk profile, better manage risk/return fears, and hence crowd in other capital.
Flexibility
Enabling customisable separately managed accounts, or allowing investors to directly participate in particular deals in investors' preferred geography or sector, to ensure investors have flexibility around the product too.
Anchoring
The design funding committed by the Community Trust not only anchored the strategy, but made it possible to do a thorough job on the research and gain credibility with the community.
Snapshot
Name: Brightlight, Te Puna Hapori
Focus: A community-driven infrastructure debt strategy. Sectors include disability housing, affordable rental housing, inclusive retirement housing, healthcare property, education property and water infrastructure. These all align with community needs and Treaty of Waitangi core principles.
Size: A minimum investment of NZD$750,000. Investors can access the strategy through:
Fund - a targeted $50mn fund size (includes Senior (Class A) and unsubordinated (Class B) debt tranches, aiming for at least $40 million and $10 million respectively.
Separated Managed Accounts – customised portfolios to meet specific investors preferences for investors with $20mn+ to allocate
Debt securities - with exposure to specific community projects.
Location: New Zealand
“I think people are still skeptical that you can truly have a product in the market, particularly targeting the Maori communities, with the right risk return profile.”