In the latest in a series of interviews with investors, charity partners, and senior board of advisors, Snowball’s Abigail Rotheroe is interviewed by Sarah Haynes, Resonance’s Social Impact Fund Manager, on gender-lens investing and why Snowball is supporting and investing in the Women in Safe Homes fund - managed jointly with Patron Capital.
Thanks Abigail, for sparing the time to chat with me today. Could you start by telling me about your role at Snowball?
I’m Investment Director at Snowball. In our context, this means I am responsible for Snowball achieving integrated impact and financial goals through selecting and actively managing our portfolio of impact investments.
And could you explain a little about Snowball? It’s mission and ambitions?
We connect investors with – carefully selected and sometimes otherwise hard to access – impact investments, and then manage these for measurable impact and competitive financial returns. Our difference is in our impact framework, and in particular the scorecard we use to diligence and assess the impact fund managers we invest in.
The Snowball portfolio is invested primarily in private markets, with public market investments allowing us to manage liquidity on our investors’ behalf, whilst investing for impact. We focus on two interconnected themes which are: social equity and environmental sustainability. Going beyond ESG, we invest in some of the world’s leading innovators – funds and their underlying entrepreneurs who have ideas and solutions for the challenges we face - who aim to contribute to creating a better future.
Our mission is to change behaviours in capital markets so that all capital is invested for positive social and environmental impact as well as financial returns.
The Women in Safe Homes fund focuses on purchasing decent and affordable homes for women at risk of or experiencing homelessness. Can you tell me why Snowball chose to invest in the fund?
This is the fifth Resonance managed fund that we have invested in and one of four in our portfolio currently. We view you as one of the leading impact managers across the UK. We like your track record of purchasing property at scale, and we have seen that in action in the two homelessness funds we were already invested in: Real Lettings Property Fund and National Homelessness Property Fund. We are also supportive of the partnership with Patron Capital, who bring deep experience in real estate.
In selecting funds, we consider impact and financial goals equally, and so this is the best way to talk through the criteria we used to decide to invest.
Meeting our impact goals
This fund sits in our social equity theme. There is a clear need for providing more housing for this group of women, and your model empowers the support charity to select an appropriate property for the needs of the women they serve.
From our existing relationship, we are confident that Resonance will focus on impact and will actively use impact data to improve and learn and prioritise the needs of the tenants. We think this puts the Women in Safe Homes fund in a strong position to deliver deep and lasting impact.
Meeting our financial goals
WISH targets 5-7% net IRR (with a cash yield of 3 – 4%) which meets our return requirements for the asset class, and we are supportive of the use of leverage to achieve this.
Fund returns are split between the rental yield on the properties (rents are paid by local housing allowances) and any property price appreciation over the life of the fund.
Revenues are Government-backed which diversifies our portfolio income streams and is uncorrelated to wider macroeconomic factors – particularly attractive in the current economic climate.
The Women in Safe Homes fund is a first of its kind in being a gender lens housing solution. Why do you think this gender lens focus is so important?
The gender-lens approach was key for us; over 50% of our portfolio is invested in social equity solutions, and we wanted to add an explicitly gender-lens fund. You have taken a deeply thoughtful approach to creating a solution, which recognises and addresses women’s systemic oppression. Resonance has worked with specialists and people with lived experience of homelessness in creating the fund, and you’ve applied gender-lens at all levels including the way you operate it – for example, over 50% of your investment decision makers and advisory boards are women.
Women’s homelessness is often rooted in trauma and domestic abuse, existing solutions frequently don’t serve women adequately and there are many knock-on impacts for women’s families. Providing additional refuge and accommodation for women affected by this inequity can be life changing.
How important to you as an investor into the fund, is it that the Women’s Sector Organisations are not just providing homes but also wrap around support to the women the fund homes?
You have a clear theory of change in place, and your partners are key to delivering that long lasting impact. The women’s sector organisations you selected to work with [link them] have experience based on years working in this area – the wrap-around support is what can break patterns in domestic abuse. Refuge, in particular, offer community based and culturally specific services, which, again, support systemic change.
And do you think that potentially the gender lens focus of the fund might have impact or influence within the wider property impact investing sector?
The ‘gender gap’ exists globally in all sectors. At the end of 2020, the public gender-lens market was valued at close to $11bn (data from GenderSmart), up from $3.4bn in 2019. Yes, we believe the Women in Safe homes fund will contribute to the increase in focus and capital flowing into closing the gender gap, influencing other investors and peers. We recommend this piece by member of our Expert Network Suzanne Biegel on the rise of gender-lens investing.
So, how do you measure the impact of your investments?
We use an impact framework to score each investment we make. The framework analyses:
The combination of the two scores creates a ‘bullseye’ score. You can read more about our approach in this piece we wrote for Pioneers Post.
And how can/does impact investing provide a solution to societal challenges such as housing and homelessness?
It is hard to quantify the numbers of people experiencing homelessness, but we know from resources like The Homelessness Monitor that rough sleeping levels in England have increased by 132% since 2010. We also know that approximately 1.6m women aged from 16 to 75 years of age experience domestic abuse – this is more than twice as many than men. In the immediate term, impact investing increases the amount of capital directed into systemic solutions for this complex problem.
Longer term, we believe that this type of investing actually changes the way we think about investing altogether. It is an activity that has a real-world effect; we think how we invest is about contributing to the type of future we want.
Thanks for your time, Abigail, it’s been a pleasure talking to you.
Abigail Rotheroe, Investment Director, Snowball
Abigail joined Snowball to make impact investing possible for all savers. Before joining Snowball, Abi had an extensive career working across a range of organisations from investment banks to non-profits including over 15 years’ experience in investment management. Just before joining Snowball she worked for New Philanthropy Capital as Head of Social Investment. Whilst at Snowball Abigail co authored The Investor's Perspective - an account of Snowball's approach to impact measurement and management. Abi is passionate about improving equality and diversity and has worked with The Young Foundation, Woman's Trust and the Fawcett Society.
Snowball provides investors with access to a broad range of actively managed impact investment opportunities. Investing in social equity and environmental solutions, the investment team at Snowball balances impact, risk and return to construct a well-diversified and low-risk portfolio which offers competitive risk-adjusted returns and measurable impact.
FIND OUT MORE ABOUT THE WOMEN IN SAFE HOMES FUND HERE
READ THE WOMEN IN SAFE HOMES FUND FIRST SOCIAL IMPACT REPORT HERE
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