Arc Social Impact Bond

Investor update, September 2025

Dear Investor,

We have now passed the one-year mark of service delivery for the Arc Social Impact Bond (Arc SIB), and we thought you might like to hear how things are tracking.

As outlined in the Investor update – January 2025, the Housing Review confirmed the Arc SIB would deliver the Stay Small Scenario, which means that the Arc Program (Program) will aim to support approximately 234 people, including 23 women.

Participant numbers

65 participants were enrolled as of 30 June 2025 (60 men and 5 women) of which 18 identified as First Nations participants. 22% of participants were engaging in the vital pre-release stage of the Program – building rapport with their case manager, being matched to a home, and preparing to move into the community – while 78% of participants had transitioned to living in the community with ongoing case management support. Total enrolments represent 87% of plan, up from 82% in March, following a delayed start to service delivery and housing supply challenges.

Program delivery

The core approach of providing individualised pre-release and post-release support continues to be implemented as envisaged, with case managers working closely with participants to prepare for their transition and sustain tenancies in the community. Limited housing availability has required greater flexibility in coordinating housing allocation and often a shorter pre-release period. These adjustments have enabled the Program to continue placing participants into stable homes.

Vacro has noted that stable housing has created space for participants to focus on their goals. However, this can bring new challenges, as other needs may become more visible – including feelings of isolation, mental health concerns, or difficulties in reconnecting with family and friends. Ongoing case management has helped address these challenges for many participants, ensuring they have the tools and networks to manage their tenancy and build new routines.

Housing supply

Demand for the Program has been very high, with prisons across Victoria referring over 600 eligible people at risk of homelessness on release. However, housing supply continues to be the biggest constraint influencing the number of enrolments. To maximise enrolments, Vacro has often condensed the pre-release period by providing more intense support over a shorter time.

Community Housing Limited (CHL) and Housing First joined the Program late last year, which brings the total number of housing providers to seven to house the planned number of participants.

In June, SVA convened a workshop with Vacro, government partners, and housing providers to share lessons about the Program, participants’ journeys, and the housing allocation process. Attendees built a stronger understanding of each partners’ needs and constraints and identified multiple opportunities to improve the housing allocation process in ways that balance practical considerations and ‘participant-property fit’. SVA will convene another workshop early next year to track progress and continue to explore additional housing sources.

What's next

The process to determine the Counterfactual Rates for each Outcome Measure (Justice, Housing and Health) is currently underway and is expected to be completed by 31 December 2025. The Counterfactual Rates are fixed baselines which are used to calculate the Outcome Improvement for each Outcome Measure.¹ We are working with our government partners to set these rates. An update on this process will be provided early next year.

The first Arc SIB Annual Report, covering the service delivery period to 31 December 2025, will be shared in June 2026.

Building a life with purpose and possibility – Josh’s story²

Josh was accepted to the Program late last year. He was assessed as ready to participate, based on his growing insight, willingness to engage, and the positive steps he’d taken while in custody. During the pre-release phase, Josh identified a continuing need for mental health support. Having participated in psychological and alcohol and drug counselling in prison, he expressed a clear desire to continue this work in the community. He also shared a preference for a quieter lifestyle, especially to begin with, so he could manage his energy and take time to adjust to life outside.

Josh’s case manager built a strong, trust-based relationship with him during this time. Together, they worked on self-care strategies tailored to the communal living dynamics of Arc House,³ while also creating a space for Josh to think about his future goals. These conversations helped Josh to articulate a vision for his life beyond the Program, centred around stability, connection, and meaningful work.

Josh moved into Arc House and quickly found comfort in familiar routines, settling in well with the other residents. Initial concerns around social withdrawal, linked to his past experiences and the stigma of his offence, were addressed sensitively. With support from his case manager, Josh gradually expanded his engagement with others and has learned how to strike a healthy balance between downtime and community connection. Over time, Josh has built pro-social relationships that reinforce his developing sense of belonging and self-worth.

Josh identified a long-term goal of working in the construction industry. With support from his case manager, he enrolled in a short training course that would give him practical skills while also building confidence. This step was about more than qualifications — it gave Josh momentum and a sense of progress, rather than imposing a pre-set pathway.

Josh is now regularly attending a building and construction certificate course and plans to complete it before applying for a carpentry apprenticeship. Counselling has become an anchor in his routine, and he has also reconnected socially, joining bingo nights with friends and spending time with his elderly aunt who lives nearby. These connections show progress towards identity reconstruction and social integration, two key parts of desistance-informed progress.

Case management support has now shifted to fortnightly check-ins, reflecting both Josh’s increasing independence and the importance of ongoing support. Plans for longer term housing are starting to be explored. At Arc House, Josh has become a quiet and stabilising presence. Many fellow residents turn to him for informal debriefing or emotional support. While he never sought out this role, he embraces it with care — a sign of the self-awareness and strength he has developed on his journey.

Thank you for contributing to a program that is changing lives by creating the conditions for stability, personal growth, and reduced reoffending. Please reach out with any questions.

Kind regards,

¹ The Counterfactual Rates will be determined based on an analysis of the Awarded Sentences (Justice), Homelessness Service Periods (Housing) and Emergency Department Presentations (Health) for a Reference Group of individuals meeting the Program’s eligibility criteria who were released from prison during the two-year period from 1 July 2021.
² This participant has agreed to share their story and their name has been changed to protect their privacy.
³ Arc House is a building with 8 studio apartments which was leased to provide housing for Arc participants. Each apartment is self-contained with its own bathroom and kitchenette. All tenants have access to additional shared living spaces.

Disclaimer and confidentiality 

This update has been prepared by Social Ventures Australia Limited (ACN 100 487 572) (SVA) as the Manager of the Arc SIB Trust (ABN 39 880 516 089). Please refer to the Arc Social Impact Bond Information Memorandum dated 21 June 2023 as updated on 25 March 2024, SIB Deed Poll as amended by the amending deed poll dated 25 March 2024 and Purchase Deed as amended by the amending deed poll dated 25 March 2024 for information on structure and terms. The information contained herein should be considered as indicative only and does not purport to contain all the information that any recipient may desire. SVA does not provide financial advice and recipients should seek independent financial advice. Further, statements in this update are not intended to be tax advice and investors should consult a professional tax adviser, if necessary, for tax advice required in connection with completion of tax returns.

To the extent permitted by law, SVA and its respective related bodies corporate, officers, employees and advisers do not make any representation or warranty as to, or take responsibility for the accuracy, reliability or completeness of any information in this update nor do they give any assurance that the results, valuations, performance or achievements expressed or implied by any forward looking statements contained in this update will actually occur. Recipients are cautioned not to place undue reliance on such information. Whilst this update has been prepared by SVA in good faith and with due care, SVA and its respective related bodies corporate, officers, employees and advisers disclaim all liability that may otherwise arise due to any information contained in this update being inaccurate or due to information being omitted from this update, whether by way of negligence or otherwise.

Investors should note that past performance of the Arc Program should not be treated as an indication of future performance. This update and all the information contained in it must not be disclosed to any person or replicated in any form without the prior written consent of SVA Nominees Pty Ltd (ACN 616 235 753) in its capacity as trustee of the Arc SIB Trust.

© Social Ventures Australia Limited, 2025

All images have been supplied and information (as applicable) has been supplied from Vacro. All images are published with the consent of the image owner.