A social impact property fund connected to the enterprise arm of the homelessness charity St Mungo's Broadway, has risen to more than £46m after Big Society Capital and Croydon Council both increased their commitments by £10m.
The Real Lettings Property Fund is the largest impact investment fund in the UK and was set up in 2013 to provide accommodation for homeless people who do not qualify for social housing. It received an initial investment from Big Society Capital of £5m last April and an additional £10m commitment last month.
Since the fund’s launch 18 months ago, 219 homes have been acquired or are in the process of being bought. Some 82 properties have already been handed over to Real Lettings and over 40 are being refurbished.
The fund is managed by impact investment company Resonance which plans to roll out the London-based scheme across the UK.
Daniel Brewer, managing director at Resonance said: “The problem and its solution are not just confined to London. It’s an exciting time for the fund as we now have three investors who have increased commitments to this currently London focused initiative.
"We’re now also planning to roll out another phase of the project for next year, looking to partner with local authorities across the UK to help homeless individuals and families through this impact investment approach.”
Current investors to the fund include the City of London, L&Q, one private individual investor and several charitable foundations investing from their endowments, including Esmee Fairbairn and Lankelly Chase.
In February 2014, the first local authority, Croydon Council, invested £10m with the promise of a further £10m if the scheme proved a success. In July 2014, it invested the second £10m, contributing significantly to the total £46m figure.
Alderman Peter Hewitt, chair of the Social Investment Board at the City of London, said: “This has been yet another successful example of the City of London’s Social Investment Fund, investing into a fund which is delivering both financial and social goals. This type of focused initiative is now becoming a serious contender for mainstream institutional investment."
A final round of investment to the fund is expected in February 2015.
Nick O’Donohoe, chief executive of Big Society Capital, said: “We are very pleased to be making another substantial investment in the Real Lettings Property Fund. For people who are homeless, or those at risk of homelessness, it’s incredibly important that they have the opportunity to maintain a tenancy as this will help them access private housing at a later stage.
"Without the type of transitional housing provided by the Real Lettings Property Fund, hundreds of people face the very real possibility of homelessness. The Fund is already making an enormous difference to the lives of homeless individuals and families who are ready for independent living, and this additional investment will help many more over the coming years.”
This story was updated to correctly refer to St Mungo's Broadway rather than Broadway. The two charities merged last year.
