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Resonance Impact Investment Funds

Resonance SITR Funds

The Resonance SITR Funds are social investment funds, which enable investors to build a portfolio of investments with the potential for attractive returns and tax relief benefits. The Funds aim to help dismantle poverty in and around their regional area of focus through backing high impact, mission-driven social enterprises. The Resonance Bristol SITR Fund and the Resonance West Midlands SITR Fund are sub-funds of the Resonance SITR Fund.

Fund structure

The Resonance West Midlands SITR Fund and Resonance Bristol SITR Fund are sub-funds of the Resonance SITR Fund. The Resonance SITR Fund and the Regional sub-funds are not constituted as separate legal entities or structures, but are each the collection of Investor Agreements under which the Fund Manager is appointed as the discretionary investment manager to make investments (which will primarily be loan note based) in SITR Qualifying Enterprises in the relevant Regions. This is essentially the same fund structure as adopted for Enterprise Investment Scheme (EIS) Funds, which are well known to the investor community.

There is a minimum investment amount of £20,000 per investor with a minimum allocation of £10,000 in any one region.

Target fund size

The Resonance SITR Fund has an aggregate target fund size of £5m per Region.

For the current target aggregate fund size and a breakdown by Region please see resonance.ltd.uk/investment-opportunities.

Target returns

The Resonance SITR Fund has a target a post-tax relief IRR of approximately 8%. The Gross Equivalent Return for a 40% tax payer on a target return would be 11.8%.

These target returns are based on 30% income tax relief arising from investments over a two year period, and an assumed average interest rate of approximately 3% during years one to three and approximately 5% during years four to six, with capital repayment between years four to six. Post tax relief 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 relief 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.

Fund activity - as at May 2018

Resonance West Midlands SITR Fund

The Resonance West Midlands SITR Fund launched in February 2018 and is now open for investment.

The Fund has already secured over £1m of investment from a number of investors. Resonance has also identified an initial £2m of investment need from a wide range of social enterprises in diverse sectors, and is looking forward to hearing from other social enterprises from across the region that are seeking investment to grow their business and social impact.

Resonance Bristol SITR Fund

The Resonance Bristol SITR Fund launched in February 2016.

The current fund size is £2.7m and to date over £1m has been deployed to a number of social enterprises operating in Bristol and the surrounding area. These include South Bristol Sports Centre, Bristol 24/7 and Chandos House. The most recent investment is into Street Impact Bristol, to support 125 people rough sleeping in Bristol over the next three and a half years, aiming to support them off the streets, through providing accommodation and vital support services tailored to each individual’s needs.

 

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