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Resonance Impact Investment Funds

Resonance South West SITR Fund

Investment product details

The South West SITR Fund is a social investment fund which enables investors to build a portfolio of investments with the potential for attractive returns and tax relief benefits, whilst also helping to dismantle poverty in and around the South West through backing high impact, mission-driven social enterprises. To date the South West SITR Fund has raised over £3m and invested over £2.3m into sixteen social enterprises.

Financial return

The SITR Funds have the following target returns:

7-8% post tax relief IRR
Based on 30% income tax relief arising from investments made over a two-year period, and an assumed average interest rate of c.3% during years one to three and c.5% during years four to six, with capital repayment between years four to six. Post tax IRR is defined as including the 30% income tax relief from SITR but excluding other potential tax effects, such as income tax on interest payments and capital gains tax relief on any losses, which will vary according to the specific tax status of each investor. As an indication, on this basis the Post tax IRR is forecast at 8.5%, and taking into account these other potential tax effects would result in a forecast IRR of 7.8% for a standard rate tax payer and 7.1% for a higher rate tax payer.

12% Gross Equivalent pre-tax return
The Gross Equivalent return is calculated by dividing the net post-tax target return of 7.1% by 0.6 for a 40% tax payer.

Social return

The Fund has a stated aim to contribute to dismantling poverty and inequality in the South West and the surrounding area. The Fund is “evergreen” and will continue to invest for the long term in diverse social enterprises intentionally addressing these problems from many different angles.

Minimum investment

 £20,000 (minimum £10,000 per region)

Maximum investment

 No maximum

Eligible Investors

These Funds are intended for Sophisticated Investors, High Net Worth Investors, Restricted Investors or individuals deemed suitable to invest in the Funds by an appropriately authorised financial advisor.

Getting your money back

The intention is to hold investments for six to eight years, based on the assumption of a 2-year period to deploy investments and a typical six- year loan period. Loan note investments are intended to generate interest income immediately, with capital repayments usually beginning after the investment has been held for three years.

All funds lent under an SITR scheme are unsecured, a clear advantage for most small social enterprises that often do not have any significant assets against which to secure finace.

This investment is not covered by any government deposit guarantee scheme. Neither interest or capital repayments are guaranteed and are dependent on the business performance of the enterprises into which your monies are invested by the Fund. Investors capital is at risk.


Each investor will typically be invested in ten to twelve enterprises. There is a minimum diversification of six investments and no more than 25% of an investor’s commitment will be allocated to any one enterprise.

Tax considerations

Social Investment Tax Relief (SITR)

SITR was introduced by Government in April 2014 to encourage investment into social enterprises – that is, businesses dedicated to generating social impact and addressing social issues. It offers similar tax reliefs to those available through the well-established Enterprise Investment Scheme (EIS), which already offers tax relief to those investing in unquoted private companies. Eligible investors can claim back 30% of the amount invested into a qualifying social enterprise against their income tax bill, either in the year the investment is made, or carried back against the previous year. SITR also makes investment more accessible for social enterprises, enabling them to access the growth capital they need more affordably.

Fund structure

The Fund is not a separate legal entity but is a collection of separate Investor Agreements appointing the Fund Manager to make investments into a portfolio of SITR Qualifying Enterprises. Investors will be allocated to investments which are completed after the relevant closing date for their entry into the Fund.

Speed of investment

It will typically take around twenty four months for an investor to become fully invested.

Voting rights

Investment in the Resonance South West SITR Fund does not give you voting or membership rights in the enterprises into which your money is invested.

Invest in the Resonance South West SITR Fund

To invest in the Resonance South West SITR Fund you will be directed to the Resonance website.

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