Big steps for first UK property fund for the homeless
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The business of providing homes to the homeless is making headway, and ushering investors into the realm of impact investment.
The first fund designed to provide accommodation for homeless people and generate profit for investors, The Real Lettings Property Fund, has received a £5.5m injection of investment.
The total investment is made up from Big Society Capital with a £5m investment and The City of London Corporation, the governing body of London’s financial heartland, who have invested £500,000.
The Real Lettings Fund, developed and managed by Broadway Homeless and Support, a charity, and Resonance, a boutique fund management business specializing in impact investment plans to buy 240 London flats to rent to homeless people, generating target annualized returns of 5%.
Broadway’s assistant director of services, Susan Fallis, said: “Big Society Capital’s investment is a real vote of confidence in the Real Lettings Property Fund, which is the first of its kind in the UK, and will have a significant impact on what we can achieve for our clients.”
“One of Broadway’s aims is to ensure every person finds and keeps a home and, through this property fund, we are one step closer to making that a reality for so many individuals.”
The fund was launched in January last year and has so far received £16.25m investment. Previous investors include London & Quadrant Housing Trust, Esmée Fairbairn Foundation and Lankelly Chase Foundation.
Designed to make a difference to the future of homeless people the Real Lettings concept has also succeeded in drawing the City of London Corporation into its first forays into social impact investment. Mark Boleat, chairman of policy and resources at the corporation, said in the Finacial Times recently:
“The City of London is working hard to cement its position as a global centre for social investment. We want to encourage new ways of thinking about return, unlock barriers to engagement and support mainstream investors to participate. We will continue to put our money where our mouth is. If others see us doing this, hopefully it will encourage them.”
Mr Boleat added that the City of London’s social investment fund currently totalling £20m could be expanded “significantly” if its first steps into social investment proved successful.
Commenting on the investment, Simon Chisholm, investment director of Resonance, said: ‘This first round of investment in the fund has allowed us to commence operations and start to build the portfolio around clear financial and social impact goals.”
“We expect the fund to seek a second round of funding later in the year based on its initial track record. At its core is a simple principle, which we believe will have wide investor appeal – investing in property, for a purpose.”