Patron Capital and the “marriage” between social impact and private equity

Patron Capital's Kendall Langford explains what the social impact of the Women In Safe Homes Fund has been two years on.

Making the world a better place is a mission being undertaken by businesses across all sectors today. In addition to turning a good profit, they understand that stakeholders, jobseekers, and wider society want to engage with social impact-driven organisations; and one business taking this to the next level is real estate private equity firm Patron Capital Partners and their Women In Safe Homes fund.

DiversityQ speaks with one of Patron Capital’s senior partners and Women in Safe Homes fund investment committee members,  Kendall Langford two years since the fund’s launch amid seismic global events.

Patron Capital: what the fund offers women and investors

In partnership with social impact investment company Resonance, the fund provides a solution to the lack of affordable, safe, and secure housing across the UK for women and their children who are at risk of or experiencing homelessness, are domestic abuse victims, has recently left the criminal justice system, or are facing poor mental health and other illnesses.

Langford outlines the fund’s social impact objective, which is to acquire assets that meet the housing requirements of its charity partners, which then lease the assets from the fund to provide safe accommodation to meet the needs of vulnerable women and their children. However, she makes clear that the fund is not involved in the support provided to the women, as this is directly dealt with by their charity partners, who are subjected to a due diligence process before they are selected.

 “The fund has been established to provide risk-adjusted returns in real estate assets with long term stable leases, whilst generating a significant social impact,” she explains. “The fund’s financial objective is to provide its investors with a capital and income return from primarily residential property within the UK. The income component is backed by government housing benefits, with investments being underpinned by leases to charity partners, generally for a duration of ten years.”

The fund’s goals and current backers

Like any successful initiative, the fund has a clear strategy in terms of ultimate goals and aims to provide 650 affordable homes for over 6,000 women over its lifetime. “The fund has a target of £100m+ with 31 properties acquired and six in the immediate pipeline. To date, the fund has handed over 16 properties to charity partners that can safely house women and their children.”

But as Langford explains, the development of the fund was no quick PR fix to look like a socially responsible firm but forms part of Patron’s long-term ethos and company culture.

“Over twenty years Patron has established environmental and social impact as integral components of its investment strategy, and every new investment explicitly considers the potential environmental and social risks as well as opportunities.” Langford also explains that Patron is a signatory of the United Nations Principles for Responsible Investment and each of their “charitable endeavours” has “three main strands” which provide relevant expertise “for the success of the fund.”

Buy-in from the top is also key to a successful company initiative, and the Women In Safe Homes Fund has this via the backing of Founding Partner, Keith Breslauer, who has not only been a “key driver” in terms of leadership support but personally invested £1 million to support its launch and scale-up, with Patron also donating over £1.5m in expenses. Now, that really is putting your money where your mouth is.

Investors that have joined the fund since its launch include Big Society Capital, MacArthur Foundation,  Guy’s and St Thomas’ Foundation, Barrow Cadbury Trust, Monday Charitable Trust, City Bridge Trust, and The Clothworkers’ Foundation and Comic Relief. There’s also international investor, Casey Family Programs, the Church of England, Snowball, and Joseph Rowntree Foundation, which has bolstered the fund to over £28m in total. An additional £10m of capital is currently under due diligence and should close by Autumn 2022.

The impact of COVID-19 on women and housing

Since the fund was launched in 2020, the UK, like other nations, has been dealing with the long-term impact of COVID-19 on the economy, and crucially on society.

Aside from poor mental health outcomes, domestic violence rose with women bearing the brunt. “The pandemic saw a sharp increase in domestic abuse by an estimated 20%, as victims have been trapped with their abusers. In the UK, two-thirds of women in abusive relationships suffered more violence from their partners during the spring lockdown, according to A Perfect Storm, a report by Women’s Aid. Refuge, the UK’s largest domestic abuse charity, reported a 700% rise in calls to its helpline in a single day and there were 4,000 domestic abuse arrests in London alone in the first six weeks of lockdown.”

However, finding safe havens for women victims of domestic abuse was an issue before the pandemic, with many turned away due to a lack of resources. “Prior to the pandemic, 23,000 or 64% of women referred to specialist refuges were being turned away, while half couldn’t accommodate women with two children, according to Women’s Aid, The Domestic Abuse Report, 2020.”

Langford continues, “the structural need [for accommodation] is very much there and has been exacerbated by the pandemic.”

Overall, it’s clear that the Women In Safe Homes fund is providing some crucial interventions that are saving lives, while also providing returns for social-impact minded investors. Before we part, Langford is keen to highlight the impact working on this fund has had on her and her wider team: “As individuals and as a firm we are extremely proud to be involved and to be honest, personally, it’s been a real privilege. I have learned so much and hopefully have taught as much as this is the beauty and the challenge of a marriage between social impact and private equity. It is extremely powerful.”

To find out more about the Women In Safe Homes Fund, click here.

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