Big Society Capital’s Impact Report looks back over the last five years at the impact the organisation and its partners have made since 2012. Daniel Brewer reflects on the development of Resonance over this time.
Resonance started back in 2002 with a mission to connect investment capital with transformational social enterprise. Over that 15 years we have stuck to that mission, and found new ways to deliver it more effectively. There’s still a long way to go, but in the last five years we’ve gone from having no funds under management to creating and managing 7 funds worth £150m, from a team of 3 to a team of over 30, and from one office to five. Along the way, the partnership of key investors like Big Society Capital has been essential to this growth.
Our first steps in 2002 were to start by serving individual social enterprises to help them think like businesses, but without losing their focus on achieving social change. That was the start of our Ventures team, which continues to work with individual social enterprise to structure and arrange the right financing solution for their situation. Essentially, it’s a corporate finance activity, but one focused on the needs of social enterprise.
Over the years, as we built our track record of doing deals, often through investors from the Resonance Angel Investor Network (RAIN), we began to really understand what deals social enterprises were interested in and capable of doing. And so the rationale for us to raise our own Funds became stronger, as a way of driving down the transaction costs for social enterprises, giving investors greater scale and diversity, and reducing the likelihood of deals not getting done in time. However, not until the dormant bank account act became a reality in the form of Big Society Capital, along with an equity investment from Nesta, did our Funds business begin to emerge.
Big Society Capital’s existence has without doubt stimulated the market and made a real difference to our own growth. They have backed five of the seven funds we operate, starting with an initial investment of £2.5m in 2012 into our Affordable Homes Rental Fund, which helps communities build affordable homes for local people. Today, our funds under management stands at a little over £150m. Our “demand-led” approach to impact fund management has led to many innovations, including scaling homelessness property funds across the UK to attract institutional investment; launching the first Social Investment Tax Relief fund with regionally focused investment in social enterprises dismantling poverty, and engaging with leading wealth managers including UBS; and finding effective financing solutions for local communities to own or develop the assets they need to flourish. We now also have regional offices in Cornwall, Manchester, Bristol, Birmingham and London which give it a unique perspective on impact investing across the UK. Across both our funds and ventures work we are now managing to average about £3m per month into the hands of social enterprises.