Arc Social Impact Bond

Investor update, January 2025

Dear Investor,

The Arc Program has now been fully operational for over seven months, and we thought you might like to hear how things are progressing, including the outcome of the Housing Review.

Housing Review

As outlined in the Arc Social Impact Bond (SIB) Information Memorandum, the Housing Review took place following 31 October 2024 to review the current housing supply and projected housing requirements of the Arc Program. The Housing Review determines the relevant Scenario for determining payments under the Implementation Agreement.

The Housing Review has been completed and the State and the Issuer have concluded that the Stay Small Scenario is the relevant Scenario. In the Stay Small Scenario, it is expected that around 234 people will be enrolled in the Arc Program, of which approximately 23 will be Enrolled Women.

We had originally anticipated that the Arc Program would support a larger number of participants,¹ however, we are pleased to advise that two new Housing Providers have signed Housing Agreements and two existing Housing Providers have increased their in-principle housing commitments. The seven Housing Providers will work together with Vacro to provide more housing options for the 234 people planned to be enrolled in Arc.

Tranche 2 Notes

As outlined in the Arc SIB Information Memorandum, the Aggregate Issue Amount is also determined based on the applicable Scenario. As a result, the Aggregate Issue Amount will be $5,508,000 in principal amount (61% of the Plan Big Scenario, $9,000,000).

The Tranche 1 Notes were $2,250,000 in principal amount. Accordingly, the Tranche 2 Notes will be $3,258,000 in principal amount (59% of the Aggregate Issue Amount). Each Investor will be allotted 1.448 Tranche 2 Notes for every Tranche 1 Note the Investor holds. The denomination of each Note is $100.

Payment of the purchase price for the Tranche 2 Notes will be required between 1 May 2025 and 30 June 2025. We will provide you with details of your Tranche 2 Notes purchase price and payment instructions in late April.

Program update

At 31 December 2024, 33 participants have been enrolled in the Arc Program, which is below plan (39). This is due to the later than expected Financial Close delaying service delivery commencement by almost two months and limited housing availability.

27 participants have moved into stable housing and the remaining 6 participants are engaged in the important pre-release component of the Program, which focuses on building a relationship with their Arc case manager and developing a plan to transition into the community. Around 10% of participants are female which is in line with plan.

The Arc Program’s housing first approach has had a strong positive impact on the participants supported so far. For many participants, it has created the potential to:

• Focus on community connection goals much earlier than anticipated
• Maintain and strengthen family relationships, due to the ability to maintain independence
• Get back on track after facing challenges or making a mistake

The impact of having a safe and stable home is shown in Josh’s story below.

Starting from home: Josh’s story²

Josh was released from prison last year. Without a home to return to, Josh was stressed about where he was going to live.

Sadly, Josh's parents and two siblings are deceased. While incarcerated, Josh learned that a cousin and several close friends had died as well, leaving him with few supportive relationships in the community. Fortunately for Josh, he was eligible to participate in Arc, and was introduced to one of the Arc case managers.

Josh opened up to his case manager, sharing his personal history of mental illness, including untreated depression and anxiety. Josh developed a plan with his case manager to support his return to the community, including a home to go to and mental health support.

Through Arc's partnerships with Housing Providers, Josh’s case manager confirmed to him that a furnished home would be waiting for him on his day of release. His case manager then focused their attention on finding a local general practitioner (GP) that Josh could connect with once he was home.

On the day Josh left prison, his Arc case manager was there waiting for him. Josh was overcome with joy upon arriving at his new home! The stress he had experienced about where he would live was subsiding.

Shortly after settling in, Josh met with his new GP who in turn referred him to a local psychologist to help attend to his mental health. Josh also met with his case manager regularly each week to get him on his feet.

In the six months since Josh has been home, he's experienced a few ups and downs. He briefly disengaged from the support of his case manager. However, Josh’s case manager did not give up on Josh, they continued to reach out and eventually requested a welfare check by the police. Fortunately, Josh was safe at home.

Josh had withdrawn from his case manager because he felt guilty about having engaged in substance use. In speaking with his case manager, Josh expressed shame for his recent behaviour, and his desire to establish a new identity; a new narrative for his life that is free of substance use.

As well as re-engaging with Arc, Josh has also returned to counselling. Through this process, Josh has acknowledged struggling with feelings of guilt and regret, believing his absence through incarceration deprived him of meaningful relationships and closure with his family and friends who have passed.

Having a safe home environment along with Arc’s ongoing support helps to ground Josh as he faces the challenges he experiences. Josh looks ahead to a future that is not defined by his past, but by his ability to create his new beginning.

We look forward to sharing more updates with you in the coming months and years. The first Arc SIB Annual Report will be provided to investors in June 2026, covering the service delivery period ending 31 December 2025.

Thank you for supporting an innovative program that provides a start for participants to create a new narrative arc for their life. Please do not hesitate to reach out with any questions.

Kind regards,

¹ In the Plan Big Scenario, it was expected that around 387 people will be enrolled, of which approximately 38 would be Enrolled Women.
² This participant has agreed to share their story and their name has been changed to protect their privacy.

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.