Resonance - Twenty Years Of Impact - Report - Page 14
REFLECTIONS OF THE EARLY YEARS
DR BOB PATERSON
SHARON GORMAN
Daniel and I first met whilst I was leading from the
University of Salford the Community Land Trust
(CLT) National Demonstration Programme in 2006-8.
This provided support and advice to twenty rural and
urban CLT projects around England. Each location
required a support organisation and in this regard
Daniel and a colleague were appointed to the role in
Devon.
Making the world a better place
I’d never heard of social enterprise or impact investing
before joining Resonance in July 2012, and began my
journey into this wonderful world. I remember Bob
Paterson became my mentor about all things social
enterprise, teaching me about the history, how it
works - it really was an education.
Community Land & Finance
One of the key findings from the National Demonstration Project was the need
to develop specific funding streams for CLTs to access development finance
and long-term loans for rental housing. To meet this requirement together
with two colleagues, we formed Community Land & Finance Ltd in 2008 as a
private company and Daniel subsequently became a director.
The key breakthrough in securing funds was from Big Society Capital, which
offered £2.5m for on-lending. Daniel was a signature to this application in 2011
and Resonance was appointed to act as fund manager.
Resonance
Upon my retirement from the University, I was appointed as a non-executive
Director of Resonance in 2012. In this regard I established a day-to-day
working relationship with Daniel in the Launceston office – I only lived fifteen
miles away across the Devon Border. I had in essence two roles.
The first was managing the business, including ensuring that the company
had a clear vision, as well as strategic and business plans in place. Resonance,
as a business, was too dependent upon Daniel and my role was to share the
responsibility with him but also to plan for future resilience. I am proud to
have worked with Daniel in achieving this and in securing the appointment of
his first two key members of staff who continue to support him today, Simon
Chisholm and Sharon Gorman.
The second responsibility was the provision of assistance, support and advice.
In my role as a Director of Community Land & Finance a key requirement was
to provide continuing advice and support for social investment in CLTs. Daniel
with his professional experience was instrumental in developing a template
that each CLT could access in devising the financial viability of their projects.
This role was formally adopted by Resonance in 2013 when a service level
agreement was signed with Community Land & Finance.
Continuing opportunities
Since my retirement from Resonance/CLF in 2014 it has been gratifying to
note the continuing impact of Resonance in the field of social investment in
rental housing, especially in light of the substantial withdrawal of the British
state from this sector. Both the residential property funds for homeless families
and individuals, and the social impact funds designed to provide equity in
community asset projects are shining examples of what can be achieved
through a continuing commitment to social entrepreneurship.
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In the early years, we worked on the ground floor of
the Brewer family home in Launceston. It struck me from day one, the real family
vibe around the place. I remember Mercy and Caleb coming in from school and
rushing to see Daniel; the chain gang we used to form to transport bags of wood
pellets into the garage to fire the wood pellet boiler; and Daniel’s parents visiting to
help us decorate.
Resonance is the first job where I feel genuinely part of something that makes
the world a better place. During my ten years, there have been so many amazing
enterprises that we’ve worked with, and all of them have moved me in one way or
another. Some that really stand out for me are: working with the inspirational Karen
Sorab at BeyondAutism raising the capital to fund their schools; closer to home
raising capital for Cornwall based Smile Together, educating 5,000+ children who
don’t have access to oral health, and giving them and their communities access to
dental professionals; and the work that Chukes and his team do at Action to Prevent
Suicide, a subject particularly close to my heart as I lost my brother to suicide.
Still a sense of excitement
Our focus going forward is on our impact property funds, and it’s funny how
we were so ecstatic buying the first property and now we’ve over 1,000! When
completions come through on the payment runs, they’re just normal weekly events
now, even though we retain this sense of excitement knowing the importance
of that property as a future home for people at a time of crisis in their lives. I
remember vividly the first property handed to tenants - a really nice, tidy and wellkept modern looking house for a single mum and her children. What struck me
was that they had been homeless, and I realised that my mental picture had always
been of people on the street. It was that precise moment that opened my eyes to the
wider problem of homelessness.
Still a family
As more people join the team, it’s been great to see that we have continued to give
everyone an opportunity to contribute at our meetings. Resonance has always
valued “Team” and face-to-face interaction. COVID-19 only managed to stall
this, and it’s great to see us all getting back together, working collaboratively and
enjoying each other’s company, particularly with so many new faces.
Resonance is growing quickly, but I’m proud that we still retain that family feel.
Unlike some companies, I can honestly say that Resonance doesn’t just talk about
being a family. Everyone pulls together, like we did on “Pellet Duty” all those
years ago.
SIMON CHISHOLM
Was I mad?
My journey into impact investment really started in
2007. Arriving back in London after four years in Hong
Kong had given me a different perspective on many
things in my own country. I had worked for over a
decade in international corporate finance and learned
something of how investment flows, but was it flowing
to the right things? I had been intrigued by an initiative
pioneered by one of my Rothschild colleagues, Keith
Palmer, to catalyse energy projects which would benefit developing countries and
could recycle donor money more effectively through investment – no one called
it impact investment then. The opportunity to serve as a Trustee of a pioneering
London homelessness charity, Broadway, led by a forward-thinking Chief
Executive, Howard Sinclair, opened my eyes to the potential for social enterprise
to create sustainable positive change in people’s lives. Could this be invested in? I
started drawing some graphs with return on one axis and impact on the other, and
discussing with friends in the social sector and investment world – was I mad? No,
they said, but it’s difficult.
The first meeting
Then I met Daniel. I still recall our first conversation at the Impact Hub in King’s
Cross in late 2011, where ideas flowed back and forth at high speed. It was a
revelation to discover that Daniel had been pioneering this approach to investment
for a decade by then, working with social enterprises of all shapes and sizes, from
community groups to major national charities, to “engineer” how investment
could best help them scale their impact. I was impressed that he had stuck with it,
one deal at a time, and learned many lessons along the way. He had a vision for
how funds could allow this kind of investment to flow at much greater scale, but
this would need Resonance to transform itself into a fund manager. He had some
backing from NESTA to bring on an Investment Director. I was sold.
The first year
Day 1 at Resonance, Easter 2012, I arrived at the Launceston office – at that time
42 St Thomas Road, with Daniel and his family living above. I was the fourth staff
member, joining Daniel, Bob (Finance Director) and Shirley (Administration).
Though my title was Investment Director, that in practice made me Compliance
Officer, Fund Manager and Head of Investor Relations. Thankfully, a decade later,
Resonance has grown to a team of over fifty and I have experienced colleagues
now covering all of these roles far better than I could in those early days! The first
big step towards that was John Williams joining later in 2012 to manage the first
fund, and Sharon Gorman joining in Launceston as a permanent Finance Director
as Bob moved to the next stage of his (very active!) retirement. John and I were both
based in the North West, so the first Manchester Resonance office was born – a
shared room with some environmental consultants in the historic Cooperatives UK
building!
As we sought and achieved FCA authorisation as a fund manager that first year,
three other organisations made a huge difference to our early development: Esmée
Fairbairn Foundation (the first investor in our very first fund), Big Society Capital
(the first investor in our second fund, and their first fund investment as I recall), and
L&Q Foundation (that anchored our first homelessness property fund with £10m
investment – a big vote of confidence at the time). It was also encouraging to find
several of my former colleagues from Rothschild interested in impact, providing
advice and in some cases investment. There is great power in the encouragement
we give each other, and I hope that’s something I have tried to give others too, over
the years.
“Daniel had a vision for how funds could allow this kind of
investment to flow at much greater scale, but this would need
Resonance to transform itself into a fund manager. He had
some backing from NESTA to bring on an Investment Director.
I was sold.”
The first homelessness property fund
By early 2013 Resonance was FCA authorised and ready to launch its first
homelessness property fund. Broadway (now St Mungo’s) had pioneered the social
enterprise approach through its “Real Lettings” initiative, providing a route back
to private rented accommodation for individuals and families with a homeless
background who were stuck in temporary accommodation. Resonance had worked
with Broadway to look at all the ways investment could help them scale up this
solution – a property fund was the chosen solution, since leases could be designed
to match the specific needs of this type of tenancy and a fund which owned the
property also provided a familiar investment structure for investors, allowing much
greater scaling of the model than if Broadway had just sought to borrow money. In
the early days of the fund, it became apparent that a granular approach to working
with housing partners, sourcing the right properties, refurbishment and handover
would be crucial to both investment and impact success, so we started building up
our own in-house property team, which is now over twenty strong. We’ve since
been able to both scale up the funds for homelessness, working with multiple
housing partners across the country, and also launch more specialist funds for
vulnerable women and learning disability which adapted that blueprint by working
with social enterprises with expertise in those areas.
Ten years on
Resonance has now built up its impact funds to become a significant contributor
to the UK impact investment sector, and can now attract institutional investment
at scale to address problems of equivalent scale, like national homelessness.
Equally, it has retained its pioneering spirit through its Impact Labs, which focus
on other forms of social enterprise investment, often linking to the social issues
being addressed through the property funds. I am glad to say that, throughout this
growth and development, Resonance has also stayed true to the early values which
attracted me to join: mutual respect for colleagues and understanding we can do
more together with our different strengths than we can alone, a singular focus on
(and inspiration from) backing good social enterprise which can transform lives,
and a preference for getting things done over just talking about them.
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