The National Treasury Management Agency (NTMA) who manage the ISIF inform me that to date in 2016, Activate Capital, which is a residential development financing entity, operational since January of this year, has provided site and working capital finance for the delivery of over 1,200 new homes. Activate's pipeline for new home construction funding is strong. The consistent feedback from developers and builders is that this specialist form of residential development lending is needed to help kick start the housing market.
It is important to appreciate that whilst ISIF has provided financing to Activate, it does not hold equity in nor is it involved in the management of the entity. Activate is itself a private commercial entity and ISIF is precluded from disclosing any third-party commercially sensitive information. Accordingly, as drawdown profiles and the value and pricing of specific loans are commercially sensitive to Activate, it is not possible to disclose this information. Doing so might actually compromise the value of ISIF's investment in Activate. However, I can confirm that the Activate base lending rate ranges from circa 6% to 10%, depending on the extent of leverage advanced and the risk characteristics of each specific project. As would be expected for projects of this nature, there is participation in equity upside if projects are successful so that the fund, and by extension taxpayers, share in any gains alongside the project promoter.
