The Federal Government is looking at ways to "de-risk" institutional investment in aged care, and is considering the Affordable Housing Bond Aggregator (AHBA) as a model.
The AHBA, which is used for social and affordable housing projects, provides low-cost funding to operators. The AHBA sources funding from wholesale debt capital markets by issuing long-term social and sustainability bonds and from a line of credit provided by the Australian Government.
Minister for Aged Care
“There’s been really successful work done in the housing space under our government to develop bond aggregation models that unlock capital investment for bigger institutional investors for whom investment thresholds might otherwise not have been able to be met,” Aged Care Minister Sam Rae.
“We’re looking at every single source of capital,” he said in an interview with The Australian, adding it is moving to encourage superannuation funds to “attract the capital investment required to meet population demand and demand of an ageing population”..
“Part of the learnings of the housing space is creating models for capital investment that meet the needs of investors who otherwise wouldn’t have been able to invest in a particular space."
The Minister added more transparent modelling and data, an outcome of aged care reforms, will help to de-risk investments by revealing the financial foundations of the sector.
