Australian Ethical opens impact fund for foundations, targets CPI+4%
What's the deal? Australian Ethical has launched the Australian Ethical Balanced Income Fund for wholesale investors, including foundations and not-for-profits. It built the fund with Australian Impact Investments (Aii)Dealroom has a profile for this one. Try Dealroom → and targets long-term real returns of CPI+4%.
How it works: The multi-asset balanced portfolio applies the firm's ethical charter and draws on a strategy with a 36-year track record. Aii handles impact sourcing, due diligence, measurement, and reporting for a dedicated impact sleeve designed to deliver measurable social and environmental outcomes.
Who's backing it: The Reichstein FoundationDealroom has a profile for this one. Try Dealroom →, an Australian philanthropic body focused on social and environmental justice, is a cornerstone investor.
Why now? Australian Ethical says foundations increasingly worry that capital funding their grants may be working against their own missions. "Foundations and not-for-profits have told us they want to manage their capital responsibly, while upholding their fiduciary responsibility to preserve and grow capital over time," chief executive John McMurdo said.
What's the endgame? The fund is pitched as an "implementation-ready" option for organisations that want impact and diversification without building a bespoke portfolio. "This fund has been designed to bridge that gap, bringing together income, diversification and a clear focus on impact within a single, professionally managed portfolio," McMurdo said.
Chief investment officer Ludovic Theau framed it as a way around complexity. "Foundations and not-for-profits are increasingly looking to evolve how they invest their capital, but many don't want the complexity of building and managing a bespoke solution," he said.
While built for perpetual-capital stewards, the fund is also open to other wholesale investors seeking values-driven strategies.
The signal: Reichstein chief executive Rachel Ball called it "an important development for the philanthropic sector as demand for values-aligned investment solutions continues to grow," pointing to a widening appetite among Australian foundations to align endowments with their missions.
Read more: fssustainability.com.au
