The Catalytic Local Investment Fund: A new way of investing in businesses helping people and planet

15 Mar 2024

The Wyatt Trust may be one of Australia’s oldest philanthropic institutions, but its gaze is intentionally future-focused.

If its 138 years of operation have shown anything, Wyatt CEO Stacey Thomas says, it’s that poverty is as intractable now as it was all those years ago when the Trust was established.

“The challenge of reducing inequality and eradicating poverty hasn’t gotten easier over time,” Stacey says.

“As we’re seeing in 2024, poverty is complex and for most Australians, a significant, unexpected life event is all that stands between us and financial hardship.”

The Wyatt Trust has set itself a quietly determined goal to deploy all its resources in an effort to reduce poverty in South Australia. While grant making remains the focus of its operations, the Trust has not shied away from exploring new opportunities to create lasting change.

“It really began from a question of, ‘How can we have an even bigger impact?’” explains Gavin Reid, Investment Specialist at The Wyatt Trust.

“The money we invest across our whole portfolio amounts to between $90 - $100 million in any given year depending on the market, and we wanted to explore what we could do to make that money have greater impact.”

While the Trust has been an active participant in responsible investing and impact investing for years, the team sensed there was untapped potential in investing with a different set of objectives.

The result was Wyatt’s new Catalytic Local Investment Fund (CLIF).

The Catalytic Local Investment Fund invests in local business enterprises that are doing good for both people and planet.

The Fund is structure agnostic, meaning the organisation requiring investment could be a standard business, social enterprise or not-for-profit.

“The Fund intentionally prioritises purpose over structure,” Gavin explains.

“We are looking for businesses that have the potential to make a significant difference, using a wellbeing economy lens rather than a purely profit-driven capitalist lens.

“Making profits for shareholders at the expense of people, communities and the environment is no longer the objective for a growing number of businesses,” he continues.

“The world is changing and investing is changing with it.”

As a philanthropic entity, The Wyatt Trust is in the privileged position of being able to use its funding as risk capital by supporting businesses that otherwise wouldn’t receive funding from commercial lenders.

With an initial focus on supporting businesses operating in metropolitan Adelaide with debt financing and patient capital, the Catalytic Local Investment Fund will operate in a space where traditional investors are absent.

As CEO of The Wyatt Trust, Stacey Thomas acknowledges that this type of investing comes with a degree of risk but says the risk of maintaining the status quo by failing to explore new opportunities is even more detrimental.

“While the CLIF will seek a financial return, beyond the return of capital, we accept that the very nature of these investments may make those returns high risk, concessional or both,” Stacey says.

“To the best of our ability, the support provided through the Fund will meet businesses where they are at which means the instruments and pathways we use to identify and process these investments may look a little different to those of a commercial lender.

“Our hope is that over time, the Catalytic Local Investment Fund becomes a model that showcases the power of creating better outcomes for us all by investing in businesses that are helping people and planet.”

Do you know of an eligible Adelaide-based business that needs catalytic support?

The Catalytic Local Investment Fund would like to hear from businesses in Adelaide that are doing good for people and planet that meet at least one of the following criteria:

  • Pre-distribution: A business that aims to pre-distribute power, wealth, time or income eg social enterprises, businesses owned by their workers and businesses paying living wages.
  • Purpose: A business that’s purpose is to deliver human and ecological wellbeing. 
  • Prevention: A business that rather than fix harm done to people and nature, aims to prevent it. 
  • People-powered: A business where decision making and agenda setting has its target audience directly involved eg cooperatives or ventures where customers co-create.

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