Impact investing?

“Incompetent Investing just doesn’t have the same ring to it as Impact Investing. We want to do more than simply earn a financial return — we want to actually change the world…”

         Jed Emerson,  One of North America’s Top 100 Thought Leaders in Trustworthy Business Behavior – 2012-2013

For most investors there is of course a need to look for a financial Return On Investment (ROI), but increasingly there is also a desire to see that investment generate some lasting social, economic or environmental impact; so called social impact investing. Building good homes for our communities would certainly contribute a lasting positive impact, given the current housing crisis in the UK.

Initiative Homes is being setup to specifically

  1. Accessibility – simply getting around your own home is becoming an increasingly difficult challenge for many as our population ages. However, these issues are nothing new and the solutions are well understood. What is not so well understood is how to move the solutions from niche or specialist provision into the wider housing stock. We are developing an integrated design and business approach based on out Initiative Design and Smart Hamlets offerings;
  2. Affordability – is closely linked to us exploring a Community Share Issue as a means of building the business. By using Community Shares we will offer our investors an interest return allowing us to reinvest more of our operational surpluses in developing affordable homes. It is also our intention to build high end sustainable homes and reinvest sales surpluses in growing the business and supporting affordable developments;
  3. Sustainable – The well documented housing shortage in the UK risks leading to a rush to build more houses at the expense of building the good quality sustainable homes that will be needed by future generations. Therefore, bringing sustainable homes into the mainstream ‘mass’ housing market has got to be an important objective if we are to leave a reasonable legacy to our children and grandchildren! We are working with a number of systems builders to establish the most cost effective build solutions for mainstream sustainable homes.

 

What are the opportunities?

Mark Carney, governor of the Bank of England, has said that problems with housing are the “biggest risk” to the UK economy. The Confederation of British Industry (CBI) agreed, saying: “A perfect storm is brewing in the housing market. Now is the time for action.”

If there is one thing that many people in the UK can agree on, it is that we face a housing crisis. There are too few homes, usually costing too much, often in the wrong places, and often of poor quality.

Guardian News Papers, 2014

We could also add “of inappropriate design” to this list of fundamental failures. Whilst these failures represent a raft of serious issues for many people and indeed organisations such as the NHS, who have to pick up the pieces inaccessible, damp and cold homes, it also presents an opportunity for those looking to invest in the UK’s future infrastructure – and make a positive difference.

We believe that the best way to deliver new homes at the right price, in the right place and to a good quality starts by talking to and working with communities to address their needs. This is what our Smart Hamlets offering is designed to address. In essence, we are putting Social Responsibility at the heart of our business model.

Share Offer

We are currently developing ideas for a share offer to Investors who have a specific interest in generating a positive social impact as well as a good financial return on their investment. This will likely take the form of a Community Share offer. In the meantime our strategy is twofold:

  1. Build a pipeline of projects supported by suitably negotiated options and Memoranda of Understanding whilst building the business model to deliver those projects. This will provide something tangible to invest in;
  2. Develop an active portfolio of subcontract work to build our capabilities, experience and networks. This will also build confidence that we are a capable organisation with a real track record.

We are currently in early stage discussions with a number of potential partners and clients both for large scale risk sharing development opportunities and specialist subcontract work. Watch out for our soon to be launched News page for announcements on projects as they develop.

We will also post outline plans for the proposed share offering as these mature.