Resonance launches new £8 million social impact investment fund to help meet increasing demand of communties across the UK for community owned affordable housing and leisure facilites.
Lara Bell, Head of Community Assets at Resonance, outlines the latest fund launch:
I am excited to announce that Resonance launches a new social impact fund, Resonance Community Developers (RCD), with an initial investment of over £8 million from Big Society Capital and Access Foundation, and an initial target fund size of £40 million by the end of 2026.
RCD will partner with local community groups to help them provide community-owned affordable homes, sports and leisure facilities and renewable energy initiatives.
The fund’s vision is for communities to be empowered to own assets and meet local needs, contribute to place-making, build economic resilience, tackle inequality and strengthen community cohesion for the benefit of us all. We believe all communities can do this with support and access to appropriate finance.
A chronic shortage of genuinely affordable homes, and a housing market unable to respond to ultra-local housing needs in England means that 92% of local authorities are not meeting affordable housing needs. Furthermore, financial pressures are squeezing public agencies’ ability to continue funding non-essential services, such as sports facilities, which they may not be legally required to provide, but which play a vital role in supporting local communities and high streets.
Resonance Community Developers has been designed with the aim to address these issues by providing an end-to-end financial package from seed funding to development finance as well as wraparound support for community groups through their entire journey, not just at one point in time. Housing and sports have been selected as the initial asset types as they meet the twin criteria of there being a community need and having a sustainable revenue model. Resonance aims to demonstrate a successful approach to community development by providing communities with equity-like finance that is patient and flexible, especially helpful during the early stages of feasibility and acquiring land and buildings.
The fund will initially focus on working with local community groups in 3 regions of the UK before expanding nationally
RCD has already invested in community projects across the 3 regions, including ACT Falmouth, where the fund is supporting a project to develop 50 affordable homes in a part of Cornwall that is in desperate need of quality affordable housing. Land banking and property price speculation has kept affordable land, homes and business rents beyond the reach of many local residents in Falmouth. This has left many households caught in high cost private rents, increasing the sense of insecurity and economic pressure people live with. This situation whilst felt all over the UK, is exacerbated in Cornwall by wages being significantly lower in the region than the national average.
Miguel Fernandez, from ACT Falmouth said: “The support that Resonance offer, both in terms of financial support and the practical knowledge of getting projects on the ground, will give us more credibility as we meaningfully engage with Falmouth residents and push us beyond the ‘Imagineering’ we’ve been doing. The commitment we’ve seen so far from Resonance, to walk alongside our fledgeling organisation, has bolstered our ambitions and commitment to show Falmouth the power of community led development.”
The launch of Resonance Community Developers is the culmination of work across a number of years, it builds on the success of previous Resonance Community Asset Funds – Affordable Homes Rental Fund and Community Share Underwriting Fund. RCD has already made investment offers into 16 projects, and has a significant pipeline of projects across the 3 regions. I would like to thank Big Society Capital and Access Foundation for their support and investment.
Mauricio Preciado-Awad, Investment Director at Big Society Capital, said: “Investing in community-owned assets can unlock new cycles of wealth creation for community organisations; enabling them to become more resilient, and less dependent on grants. Over time, this has the power to reverse social inequalities – which have become even more apparent in the wake of COVID-19.
“We are delighted to be supporting Resonance Community Developers, because it aims to support organisations through their entire journey – from the seed funding stage to development, with continued wraparound support throughout. The fund also appealed to us because it is structured as an innovative blended finance model, and is testing a new way of combining grant and investment funding to best suit the needs of communities.”
Kate Kuper, Access Trustee and Chair of the Flexible Finance Investment Committee said: “Access is excited to be supporting the full launch of Resonance Community Developers. Our Flexible Finance programme is designed to help create social investment funds which are not only viable and impactful, but also offer products not previously available and which are more patient and more adaptive to the needs of charities and social enterprises. All funds also need to demonstrate an ability to address historic inequalities and ensure that underserved groups and communities can access the finance on offer. Resonance Community Developers strongly meets all of these objectives and will be a valuable addition to the social investment market.”
The aim is to attract institutional, pension funds, foundations and government as investors into the fund, who will be attracted by Resonance’s track record, the potential of a targeted risk adjusted financial return, but importantly the strong focus on achieving substantial positive social impact, by helping to support communities to be empowered to own their own local assets.
The fund is evergreen and aims to grow to £40 million over the next 3-5 years, with the ambition to reach £100 million over its lifetime. By end 2026 the fund aims to have invested into 60 communities, supporting up to 180,000 people, build 750 affordable homes, housing 2,000 people, and build or enhance 20 sports and leisure facilities.
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Resonance Limited is a company registered in England and Wales no. 04418625
Resonance Impact Investment Limited, a subsidiary of Resonance Limited, is authorized and regulated by the Financial Conduct Authority (FCA). Firm number 588462.
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