Homelessness charity Broadway is launching a social investment fund which will buy accommodation to support homeless people.

The new fund, which Broadway says is a first, will support the charity’s Real Lettings operation which offers affordable accommodation in the private rented sector for former homeless people who do not qualify for social housing, but are ready and able to maintain a tenancy.

Resonance will manage the fund, which will bulk buy units from developers and landlords, then lease them to Real Lettings who will guarantee rent and take on management and maintenance risk, helped by residential developer United House.

Resonance is aiming to raise £15m this summer from housing associations and charitable foundations and a further £30m in 2013, with potential to increase the fund to more than £100m by 2014 to enable larger institutions to invest.

Some trusts are considering, under new Charity Commission guidelines, using their endowments to achieve a commercially risk-adjusted return whilst delivering a clear social impact.

Howard Sinclair, chief executive of Broadway, said: “The fund offers a sustainable path to providing homes for formerly homeless people. It will enable Real Lettings to expand and provide a yield for investors. All in all, a smart solution.”

Broadway’s Real Lettings initiative already leases 220 flats and the fund will allow it to expand by purchasing around 250 one and two bed flats, mainly in outer London boroughs.