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New Simplicity fund focused on residential property investments

Published on 28/02/2024

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Editors update: This replaces the post published on 30/10/2023 entitled “25,000 home target for new Simplicity fund”

Simplicity has launched a new fund focused on residential property sector investments.

Our new Homes and Income Investment Fund aims to provide investors with exposure to the build-to-rent development, first home mortgages, and community housing bonds, and to contribute to the achievement of Simplicity’s aspirational goals to help increase the supply of quality residential housing in NZ over the long term.

Via our KiwiSaver and Investment funds, Simplicity already invests around 5% of its total funds under management into:

  • Shares in Simplicity Living, a build-to-rent home developer and operator

  • First home mortgages (new and existing homes) for qualifying Simplicity members, and;

  • Community housing bonds and other fixed income investments.

As at 29 February 2024, over $327 million has been invested in residential housing-aligned investments across New Zealand, with a total of 1,564 rental homes completed, funded or in development through Simplicity Living, community housing providers, and first home mortgages.

Via the new Homes and Income Investment Fund - a residential property focused fund - Simplicity aims to generate competitive risk adjusted returns for investors, while focusing more investment into areas that help achieve Simplicity’s aspiration to help increase the supply of homes across New Zealand over the long term.

We estimate that if our KiwiSaver and Investment funds, including the new Homes and Income Fund, can gather and direct $10-15 billion into housing sector investments over the next 15 years this investment could potentially help to:

  • Build up to 10,000 build-to-rent homes via Simplicity Living; 

  • Lend up to 10,000 low-cost first home mortgages for its members; and 

  • Fund up to 5,000 homes built by community housing providers.

“Our housing crisis is fundamentally an issue of supply,” said Sam Stubbs, Managing Director of Simplicity. “So investing in a way that helps increase the number of homes across New Zealand in the long term is a meaningful way to help address our housing crisis.”

“And helping first home buyers with competitive mortgage rates will also make a difference,” he adds.

“We’ve spent the last three years investing some of our KiwiSaver and Investment funds into the residential property sector through Simplicity Living, first home mortgage lending, and community housing bonds,” said Mr. Stubbs. “The new fund will help do even more.”

The new fund will target to maintain 40% in cash and equivalent assets to provide liquidity so investors will have full access to all their money at any time, with no withdrawal fees or penalties.

“We think this is another opportunity to make money and do good,” he said.

The fund launched on 27 October, with a minimum investment of $1,000. For more information, visit the fund page.