A new £5m social investment fund has launched in Bristol to promote investment in charities, community interest companies and community benefit societies.
The first of its kind in the UK, it has been developed and run by social impact investment company Resonance and sponsored by UBS Wealth Management. It is open to eligible investors with a minimum investment level of £10,000. 
Resonance Daniel Brewer managing director said: “The potential removal of the EU cap on investments is going to be a gamechanger that would allow social enterprises to access all the capital they need and, in due course, help replicate this further.”
Jamie Broderick CEO of UBS Wealth Management added: “We are really excited about supporting Resonance to develop the first SITR (Social Investment Tax Relief) fund in the UK. Following a very successful launch of our UK Philanthropy services in 2014, we wanted to widen the opportunities for our clients to use their wealth to deliver a positive social impact.
“The SITR fund will hopefully enable them to do this whilst as the same time realising a clear financial return.
“Inner city poverty is all around us and we want to be part of the solution. History has shown that we cannot expect governments and charitable organisations to resolve enduring social issues on their own.
“The SITR fund will hopefully connect capital markets to the social sector and that offers a potentially innovative agent of change. We want our clients to have access to this sort of thought leadership and practical social investment opportunity.”
The Resonance Bristol SITR Fund will harness a new Government initiative to empower social enterprises to tackle inner-city poverty while still providing an attractive return to investors. Some of the social issues that investments will tackle include job creation, skills development, debt reduction and support, improved standards of living, health and wellbeing, addressing the needs of addicts and ex-offenders, improving access to affordable accommodation, alleviating long-term unemployment and reducing the cost of living. 
Funds and tax experts from Bristol law firm Burges Salmon helped develop the SITR fund.
The Burges Salmon team, led by funds partner Tom Dunn, has been advising Resonance on the structure of the fund from a financial services regulatory compliance and tax perspective.
The firm has also been advising on other aspects of the SITR regime in terms of the qualifying criteria for investments and identifying the state aid restrictions of SITR. Burges Salmon will continue to advise Resonance on the legal documentation to reflect the final structure of the fund.
Tom Dunn, pictured, said: “We are delighted to have been advising Resonance on this exciting project and very much look forward to the forthcoming launch in Bristol.”
Resonance last year piloted an SITR fund with a small group of angel investors which made its first investment of £70,000 in FareShare South West, the organisation which diverts surplus food that the food industry would otherwise waste, to organisations that work with vulnerable people.
FareShare South West has also developed a catering arm which uses surplus food to provide a fine dining experience at festivals and larger scale events, as well as general catering services at smaller events.
FareShare also offers work experience and job opportunities for vulnerable individuals who have been excluded from the jobs market.
Resonance has a vision for up to eight more such funds in cities across the UK. The development of the fund is being sponsored by wealth manager UBS and it will be marketed to UBS clients, among others, seeking to raise around £5m to invest in local social enterprises. Resonance intends to create SITR funds in cities across the UK over the next two to three years, with a target of £30m worth of investment.
Impact investment firm Worthstone conducted independent due diligence on the fund. Director Gavin Francis said the fund “comes closer to meeting the needs of financial advisers whose clients want to access social impact investing than any other product has to date”.
He added: “It benefits from tax relief, is pseudo-pooled to help mitigate risk, and it offers an attractive target return. I believe its introduction – and the fact that a wealth manager of the scale and significance of UBS is recommending it, where suitable, to clients – will herald the arrival of social investment advice to retail investors in the UK.”
