Financial Standard: IBA launches REIT for Indigenous Investors
27th January 2014
Indigenous Business Australia (IBA) has launched an Indigenous Real Estate Investment Trus (I -REIT) offering indigenous investors access to a diversified commercial property portfolio. The initiative will give indigenous groups the chance to invest funds - received through grants, native title settlements and other channels - in asset classes other than the favoured medium of cash and term deposits.
Currently four groups are participating in the I-REIT - Gundjeihmi Aboriginal Corporation (GAC), Groote Eylandt and Bickerton Island Enterprises Aboriginal Corporation (GEBIE), Wunan Foundation and Yarnteen Corporation - but IBA anticipates more groups will get involved.
Rajiv Viswanathan, IBA's general manager of investments, said: "There's a real move in indigenous organisations towards longer -term investment thinking. While inflation risk makes over exposure to cash risky, Viswanathan said there are cultural barriers that discourage indigenous investors from participating in the mainstream investment market. He said that the I -REIT could serve as an "entry point" to groups with little investment experience.
"When dealing with indigenous groups, trust and alignment are very important, given the history of many of these groups and the communities behind them," he said. "It's very important that financial institutions when dealing with indigenous groups understand their history and circumstances, and build up trust over time.
"You can't just roll up in the way that you do with a super fund" he added.