Bridges Fund Management, Resonance and Social and Sustainable Capital (SASC) are working with Big Society Capital (BSC) to deliver a new UK government pilot scheme to provide housing for the homeless.
The three impact investment managers were named by the Ministry of Housing, Communities and Local Government (MHCLG) in an announcement that the UK government and BSC would each provide £15m (€17.4m) to help deliver 200 homes for rough sleepers.
The three-year pilot will fund the purchase of existing housing in partnership with local organisations to be rented out at affordable levels.
MHCLG said it was the first time it had used “social impact investment” to fund new homes.
Asked whether institutional investors would be able to invest in the initiative, a spokesperson for BSC said: “This scheme is not open to investment itself, but a number of the funds involved in the scheme are raising capital.
“These could be a potential investment option for institutional investors, including pension funds. Any potential investors would need to contact the fund managers for details.”
Anna Shiel, head of origination at BSC, said: “This partnership between central government and BSC is the first of its kind, and a promising demonstration of the role social investment can play in delivering national policy objectives aimed at ending rough sleeping and homelessness.
“It is also an example of how public sector bodies can use social investment to put public money harder to work by leveraging additional money from investors.”
“Thanks to the combined efforts of the impact fund managers Bridges Fund Management, Resonance and SASC, £80.4m of additional investor capital has been brought into the sector.”
Bridges runs a series of social-impact property funds, SASC recently launched a social housing fund, and Resonance has launched property funds that seek to address homelessness specifically.
In March, Resonance announced the launch of its latest homelessness fund, The Resonance Everyone In Limited Partnership, which aims to acquire homes to lease to charity and social landlord Nacro.
The new pilot scheme follows last year’s Everyone In initiative by the UK government which brought thousands of rough sleepers into temporary hotel accommodation during the country’s first COVID-19 lockdown.
Last month, during an IPE Real Assets virtual conference, Simon Chisholm, CIO of Resonance, said the government’s response to the pandemic had led to “almost a revolution in homelessness” but warned it had to be followed up with further initiatives.
He said: “What is the move-on opportunity for the people who are now in a hotel, so that they do not return to the streets? And I think it’s been very interesting to see how these homelessness property funds have been able to provide pathways out of that.”
Baroness Barran, minister for civil society, said the £30m of funding through the new pilot scheme was in addition to £750m committed by the government this year to tackle homelessness.
Support from charities and social enterprises that specialise in housing vulnerable people will be available to help residents maintain their tenancies, including addiction services, education and employment support and counselling.
Writing in IPE Real Assets earlier this year, Ben Rick, CEO of SASC, argued that it was important that investors supported front-line charities as well as investing in directly in property when looking to make positive social impact.
“Homelessness is about more than bricks and mortar,” he said. “People become homeless for multiple reasons, including family breakdown, addiction, domestic violence, or being released from prison with no-one to take you in. Without direct support, many will be unable to deal with that personal crisis.”
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