The first tranche of Mencap’s charity bond has closed early due to significant interest, and the second has been extended by a month.

The £10m charity bond, launched by Mencap’s housing arm Golden Lane Housing, will fund 30 permanent homes for people with a learning disability. The first beneficiaries of the bond moved into a house in North Yorkshire earlier this month.

The bond has already attracted over £8m in total from a mix of retail and institutional investors who each put forward £2,000 or over. Golden Lane Housing has now had to stop accepting investments of less than £84,000 due to EU regulations but is extending the deadline to invest more than this amount until 28 June.

Triodos Bank worked in partnership with Mencap on the bond issue. Dan Hird, head of corporate finance at Triodos Bank, said: “The Golden Lane Housing bond’s success demonstrates strong appetite from both institutional and individual investors for an attractive blended financial and social return and is a great example of the emergence of social investment as an asset class.”

Investors into the bond will receive a fixed yield of 4 per cent per annum for the five-year fixed term.

Golden Lane director Alistair Graham commented: “From our point of view it’s a great way to raise capital to buy housing because we are unable to get grants anymore. The bond is leading the way to a new model for social investment within the charity and housing sectors.”

Golden Lane Housing was awarded £349,000 from the Big Lottery Fund (BIG) to help develop its bond proposition. The funding was allocated under BIG’s Next Steps: Supporting Social Investment in England scheme, which is exploring the potential of new approaches to raising finance that will help address significant social issues. 

Click here for more on Mencap's bond, and how fundraisers are engaging with social investment.

 

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