By Simba Marekera, Global Head of Private Markets, Brightlight
Place-based investing starts from a simple premise: capital that stays close to the community it serves, invested in the actual buildings people live in and the services they rely on, tends to do more good than capital that treats housing and community infrastructure as an abstract asset class. Done well, it means a family getting a warm, dry home instead of staying on a register for years. It means a young person leaving state care into stable transitional housing instead of emergency accommodation. It means someone rebuilding their life after prison having a door to close at night that isn't at risk of being taken away because a landlord decided to sell.
Te Puna Hapori is a place-based investment platform that provides debt finance to community housing providers across Aotearoa New Zealand. Brightlight has stewarded it since 2019.
Seven years on, the platform has grown into a portfolio spanning six housing sites and four community organisations across Auckland and the Waikato. Last year alone the sites in its portfolio housed 437 people, 73% of them Māori, in social and transitional housing ranging from homes for singles and couples on the social housing register to transitional housing for young people and for people rebuilding their lives after time in the justice system. Brightlight does not own a single one of those homes. The long-term owners are the community organisations and the property partners they work with.
We published Te Puna Hapori's first Impact Report in August, our first full public account of how the platform is performing against both financial and social outcomes, including where our own measurement is still maturing. It's a milestone worth marking, and a good prompt to explain the structural thinking behind how the platform was built in the first place.
We didn't start with a fund concept. We started with a question: what's actually missing in this market, and where does private capital have a genuine role to play?
That question feels increasingly relevant across North America and Australia, other key markets Brightlight works in. In Australia, more than 206,000 households are on social housing waitlists at June 2025, up 12% on the year before, with around 86,000 in greatest need. In New Zealand, social and community infrastructure, including affordable housing, is among the issues investors most want their money to support, and Australian investor appetite for impact is no longer a niche conversation. The harder question in both Australia and New Zealand isn't whether the appetite exists. It's where the gap in funding lies and whether a fund manager can fill it without displacing the organisations who should own these assets in the first place.
Who else is already doing this work, and doing it well
The first thing worth saying is who else is already doing this work, because place-based investing only works as a system, not a solo act.
In New Zealand, banks provide senior debt to community housing providers and have become increasingly comfortable doing so. Specialist lenders have built capable books in this space. Government agencies, including the Ministry for Cities, Environment, Regions and Transport (which absorbed the Ministry of Housing and Urban Development in July 2026), Oranga Tamariki, and the Ministry of Social Development, run long-tenor revenue contracts that underwrite the income side of these deals. Philanthropic foundations and trusts provide cornerstone capital and patient governance. And the natural long-term owners of these assets are the community organisations themselves.
We don't think a fund manager should sit on the long-term ownership side of community housing. That belief shapes everything else about how Te Puna Hapori is structured.
Where the finance gap actually sits
Once you've mapped who is doing what, the next question is where the funding gap exists.
When we worked through this with our partners in New Zealand, the gap consistently sat below senior debt: mezzanine finance (a layer of debt that sits between the senior bank loan and the equity, typically higher-risk and higher-return), sometimes called subordinated debt, which acts as equity-adjacent capital that lets the community organisation hold the equity itself. Deals were stalling not for lack of a willing lender or a capable borrower, but because that middle layer of the capital stack isn't available.
Te Puna Hapori was built to fill that gap. It provides mezzanine and flexible senior debt, depending on what each deal is missing, to proven community housing providers acquiring housing critical to their mission.
Two examples from the portfolio illustrate how this plays out in practice. Grace Foundation, working with a property partner, acquired housing across two Auckland sites supporting men released from prison or on bail awaiting sentencing, backed by a long-term government contract. Mana Services in Hamilton did the same for eleven units of youth transitional housing across two sites. Te Puna Hapori invested alongside the equity and the contracted government revenue, and in the Grace deal alongside a senior bank and the property partner. Take any one of those parties out, and the deal doesn't close.
Te Puna Hapori's approach to place-based investing is to provide gap-filling capital, deployed where the community is, owned at the end by the people doing the work. Scale comes from repetition, from doing the same disciplined thing well, deal after deal.
Diligence that treats impact and financial risk as one process
For us, in order to do place-based investing well, investment diligence and impact diligence aren't separate workstreams. Before any deal, we ask three questions, in order: What is the borrower's theory of change, what does this organisation believe, structurally, about the people it serves, and how does the capital fit that theory? What outcomes are we measuring, in the short and long term? And how are we measuring them appropriately, because sometimes that means a structured survey, and sometimes it means sitting in a room with the partner and having a conversation, and the difference matters.
On the financial side, it's the conventional discipline any lender applies: checking who we're lending alongside and to, how much risk sits in the loan, where our claim on the asset ranks if something goes wrong, whether the contracted revenue is solid, and what the exit looks like. The two diligences inform each other. Neither is decorative.
This is hard work, and it should be treated as such
There's a temptation in this space to want to have it both ways: to take on some of the most difficult social problems in the country and expect it to be easy. It isn't, and pretending otherwise does a disservice to the organisations doing the real work. The structure has to be designed to balance risk and return appropriately for its asset class, and that discipline is what makes the capital durable enough to keep showing up.
The heroes of this story are the community organisations. The capital stack only closes when every party in it plays its part: the banks providing senior debt, the government contracts underwriting revenue, the philanthropic capital that got things started, the property partners, and the community organisations that will own these assets long after any single investor has moved on.
Te Puna Hapori is one piece of what a working place-based investing model looks like. The community organisations doing the work, the government contracts, the philanthropic capital, the banks, and the whānau themselves, they are the rest of it.