Breadcrumbs

Bristol Together raises £1m in bond funding for ex-offender project

By David Ainsworth, Third Sector Online, 14 June 2012

Bristol

Bristol

The project employs ex-offenders to repair homes, which will be sold at a profit to repay investors

A social enterprise has successfully raised £1m in bond funding, including £250,000 from private individuals, for a project that employs ex-offenders and long-term unemployed people to repair homes to be sold at a profit.

The scheme, run by the community interest company Bristol Together, will employ up to 200 ex-offenders to repair 40 empty houses. It will be funded by bonds paying 3 per cent per annum over five years.

Investors’ capital will be repaid through the sale of the houses at the end of the five-year project.

A group of private individuals investing £250,000 in the scheme will be able to claim community investment tax relief, which will allow them to reclaim 5 per cent of the value of their investment in income tax each year, making the bond effectively worth 8 per cent a year to them.

Bristol Together had to qualify as a community development finance institution to offer community investment tax relief, a relief aimed at encouraging investment through social lenders.

The rest of the funding came from a small group of foundations including the Esmée Fairbairn Foundation, Lankelly Chase and the Barrow Cadbury Trust.

The funding is the second tranche of money raised for the project. Bristol Together raised £600,000 last year for a 'proof-of-concept' phase.

Dan Hird, head of corporate finance at Triodos Bank, which advised on the bond issue, said it had been over-subscribed.

He said the deal attracted a number of private and charitable investors looking for a "blended social and financial return".

His organisation and Bristol Together will now look into whether the model could be replicated elsewhere in the UK, he said.

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