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Investing in job creation for ex-offenders
Impoverished Midlands homes get new life
15-07-2013 | Triodos Bank, the leading European sustainable bank, is working with Midlands Together to raise £3m through a five year bond.
A staggering 58.2% of short term offenders re-offend within 12 months at an estimated annual cost of £9.5 - £13 billion to the UK economy . This is why Midlands Together plans to create significant employment opportunities in the construction industry for ex-offenders, as work is the most effective way to cut re-offending rates.
"The Midlands Together model offers an alternative to hopelessness, removes barriers to employment, brings empty houses back into good use and will result in the reduction of crime and the damage it does to community and its cost to society."
Richard Nicol, CEO of Midlands Together
Midlands Together achieves this through a commercially sustainable business model of buying empty and sub-standard homes and working with social enterprise partners to engage ex-offenders in the repair, refurbishment and restoration. Once the properties are fully restored they are then sold and the original capital, plus any profits, re-invested back into the business to finance further property purchases and further job creation. In so doing, offenders are equipped with the confidence, training and paid experience required to secure ongoing employment in the sector.
Midlands Together is seeking to raise £3 million to enable it to buy, refurbish and sell approximately 15 properties a year and, through a constant recycling of the capital, invest over £2 million into the wages, training and mentoring of 100-150 ex-offenders over the five year life of the bond.
Midlands Together is the roll-out of the award winning social enterprise Bristol Together (Social Enterprise Awards 2012). Bristol Together, founded and managed by Paul Harrod, has now been fully trading for 18 months, buying and renovating 7 properties and employing c. 35 clients in the process - only one of whom is known to have re-offended.
Midlands Together is issuing a £3 million five year bond offering investors an annual fixed return of 4% or 6% (depending on the instrument they elect) secured against the company's assets - including its freehold property portfolio. In addition, availability of Community Investment Tax Relief (CITR) can increase annual fixed gross returns to 12.5% for corporate investors and 15.1% for highest rate (45%) taxpayers.
The availability of CITR is dependent on an investor's own circumstances, current tax legislation and HMRC practice as well as Midlands Together's ability to manage its operations in compliance with the CITR regulations. Like all investments of this type, capital invested in the Midlands Together bond is at risk, meaning an investor might not get back the full amount invested. It is also illiquid as the bonds do not trade on a recognised investment exchange so investors cannot access their capital during the life of the bond.
Richard Nicol, CEO of Midlands Together, said: "The Midlands Together model offers an alternative to hopelessness, removes barriers to employment, brings empty houses back into good use and will result in the reduction of crime and the damage it does to community and its cost to society."
Dan Hird, head of Corporate Finance at Triodos Bank, commented: "We are pleased to be instrumental in the roll out of the Together model to the Midlands and confident the high calibre management team and board will make a success of it. We believe the investment will appeal to charitable trusts, housing associations, corporates and other sophisticated investors who want to be part of the solution to breaking the cycle of re-offending in a sustainable manner."
Nick Bacon chair of Midlands Together and investor in the bond added: "I am delighted to be part of the Together expansion. Midlands Together offers a unique social investment opportunity by giving ex-offenders the training, skills and employment they need to help turn their lives around, through a sustainable commercial business model that can pay investors a return on their capital."
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Important notice: This press release has been approved by Triodos Bank NV ("Triodos") for the purposes of Section 21 of the Financial Services and Markets Act 2000. Triodos (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012) is authorised by the Dutch Central Bank (DNB) and regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). Details about the extent of our regulation by the FCA and PRA are available from us on request. Registered office: Triodos Bank, Deanery Road, Bristol BS1 5AS.
This press release does not constitute an offer or invitation to subscribe for bonds. Midlands Together CIC published an Investment Memorandum in July 2013. Applications can only be made on the basis of, and subject to, the information contained in the Investment Memorandum. By making an investment, your capital will be at risk. It may be difficult to sell or realise your investment or to obtain reliable information about its value or other risks to which it is exposed and you may not get back the full amount invested. An investment in the Midlands Together bond is not part of the Financial Services Compensation Scheme and your capital is at risk.
Midlands Together CIC is a community interest company limited by shares, registered in England and Wales with registered office at Greenway Centre, Doncaster Road, Bristol BS10 5PY (registered number 8216835).
About Triodos Corporate Finance
Triodos is one of the world's leading sustainable banks. Its advisory arm, Triodos Corporate Finance, works exclusively with sustainable businesses and has a long track record of advising businesses on raising capital through private placements and retail offers. Over the past 3 years, Triodos Corporate Finance has raised over £45 million for businesses within the sustainability sector with investments from institutions, charitable foundations, private high net worth individuals and retail investors. www.triodos.co.uk