UK’s largest ever unlisted charity bond will buy houses for people with a learning disability
Golden Lane Housing (GLH), the housing arm of Mencap, launched a £10m charity bond on 15 February 2013. It will raise money to buy homes for people with a learning disability.
GLH say it is the UK’s largest ever charity bond issue of its kind.
Investors in the bond, which has a minimum investment level of £2,000 per investor, will receive a fixed gross yield of 4% per annum for the five year fixed term.
Working in partnership with leading sustainable bank, Triodos, the charity is aiming to raise £10m from a wide range of social investors for this bond before the closing date of April 30th .
Alastair Graham, director of Golden Lane Housing, said: "The main target is charitable trusts and foundations but we did issue a smaller ten year bond in 2003 and hope some of the bondholders will transfer their bonds. Also, the lower threshold means the bond is open to retail investors."
GLH views this bond issue as the first step in raising up to £30m over the next few years, which will mean that in total, investors will give 250 people with a learning disability the chance to live independently in specially adapted homes.
Graham added: "Two factors are driving innovation in social investment. The economic situation means bonds look like a good investment. A four per cent return is financially attractive. At the same time cuts in government funding and grants mean that third sector organisations are looking for other other forms of finance. This model is a lot better for us than taking out a loan."
Just 1 in 3 people with a learning disability currently lives independently. Recent Mencap research found that eight in 10 councils in England and Wales report a housing shortage for adults with a learning disability in their areas, with 67% stating this has worsened in the last 12 months.
GLH and Mencap work with local authorities and NHS commissioners to find funding for suitable properties for people with a learning disability and then develop packages of support so that they are able to live independently.