Aoifinn Devitt: The first series of 2022 is brought to you with the kind support of Herd Capital, a Chicago-based asset manager that invests in public equities in the technology, media, telecommunications, financial, and industrial sectors. The firm was founded in 2011 and manages assets via a long-short fund and a long-only fund. How can finance bridge the gap to house some of society’s most vulnerable members? Let’s find out about place-based impact next. I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by Simon Chisholm, who is Chief Investment Officer at Resonance Limited, an investment manager focused on achieving social and place-based impact. It currently runs funds focused on three themes: homelessness, housing for vulnerable women, and housing for adults with learning differences. It has over 20 years of an impact track record and has housed over 2,300 people in 1,000 properties since inception. Simon previously spent over 16 years in investment banking and also holds a number of board roles. Welcome, Simon. Thanks for joining me today.
Simon Chisholm: It’s a pleasure.
Aoifinn Devitt: So let’s start with your background and career journey. Where did you grow up? What did you study and how did you come to enter the world of investing?
Simon Chisholm: So I spent my early years growing up in Buckinghamshire and also Sussex, where I went to an interesting school called Christ’s Hospital, which has a fascinating history. It was actually a charitable foundation of Edward VI for the poor children of London. So you could actually say it’s an early social enterprise. I then moved on from there and studied economics and politics at Durham, and then on and went on and did a master’s in economics at Bristol. And that really kind of then took me through to joining Rothschild in the mid-’90s in London on their graduate intake. And I spent 16 years with them in London and Hong Kong, working on a range of transactions, mainly in the infrastructure sector. And I guess what kind of attracted me initially, to be honest, into investment were the people. And there were some really interesting people working at Rothschild at that time had really diverse backgrounds, former economics lecturer, nuclear physicist, geologists. They weren’t your typical stereotypical investment bankers. And I think that was one of the things that got me into the company.
Aoifinn Devitt: Fascinating. And can you tell us a little bit now about your work at Resonance?
Simon Chisholm: So I joined Resonance now 10 years ago as Chief Investment Officer to help its founder, Daniel Brewer, build up our impact fund management business, and that really was based at the time on the previous 10 years which Daniel and residents had spent as real pioneers in UK impact investment. So 10 years on, we now manage a range of impact investment funds. The largest are our property funds, and those really try and do two things. Firstly, deliver good property-style returns with some long-term inflation-correlated income and diverse exposure to long-term UK resi property appreciation. But also importantly to achieve a targeted and measurable social impact on some specific issues through partnering with, with specialized housing and support providers. So that’s really 3 fund strategies now focused on homelessness, on learning disability, and on vulnerable women. And it’s a team of 50 now across 3 UK locations which combine a range of investment property and social enterprise skills.
Aoifinn Devitt: Quite a bit to dig into there. So let’s go back a bit to the concept of impact investing when you joined Resonance Capital, how well it was articulated then, and how do you think that’s evolved in terms of investors’ understanding as to what impact-based investing means?
Simon Chisholm: Yeah, I was first interested in impact investing myself through my work as a trustee of a homelessness charity. And it was really in that time I began to see them use business models to break down some aspects of the homelessness problem. A social enterprise approach. And that was what convinced me that investment into that type of social enterprise could be highly impactful. But when I joined Resonance, I guess 10 years ago, impact investing, I think, was beginning to be understood as distinct from ESG. Big Society Capital had been recently founded at a similar time and has since really helped, I think, champion this market in the UK. And I think 10 years ago, perhaps there was still a bit of confusion about the spectrum of capital, as it’s now termed, and whether impact investing necessarily meant trading off returns. But now I would say 10 years later, institutions are confidently allocating to impact and moving beyond ESG in the knowledge that they don’t need to trade off good risk-adjusted returns.
Aoifinn Devitt: Place-based impacts as a focus. Why did you choose those particular themes? And do you think that they are well covered elsewhere? Do you think they’re well understood as being themes that are necessary to target?
Simon Chisholm: Yeah, I mean, I think there are many ways that you can approach impact investing, and no one is saying there’s a right and a wrong, but Resonance has always had a very simple strategy there, which is to start with the social enterprise. So we saw a really effective social enterprise model in homelessness 10 years ago, which really needed access to residential property at scale in order to break down that aspect of the homelessness problem. And so the early impact property funds were built around that social enterprise model and have scaled that up very significantly. We then really quickly realised with other housing providers and support providers that there was a way of adapting this model to other needs, including adults with learning disability. So we worked with organisations who knew what was needed in that space to you design, know, a different fund with some different characteristics that would, would best address that need. And then most recently, through the Women in Safe Homes Fund. We have partnered both with women’s sector organizations across the UK and also as fund manager with Patron Capital to deliver a fund that’s focused on those specific needs, particularly women fleeing domestic abuse and coming out of prison.
Aoifinn Devitt: And I suppose one of the questions would be, how do you measure impact? And if you wouldn’t mind going through maybe one by one each of your themes in terms of how you measure the impact and how that maybe gets calibrated by the investors?
Simon Chisholm: Sure. For us, it’s really important that impact measurement is also tied to impact management. So can you use the information that’s coming back to improve the impact of the model over time? So we always, for each of the funds that we launch, work closely with the organizations who understand what makes it work for tenants in those different circumstances to establish the metrics that they think will tell us that. So for example, in homelessness, we worked in the early days of those funds very closely with homelessness charities who really said this type of move-on accommodation, which is providing the opportunity for people to get back into private rented accommodation often who are stuck in temporary accommodation, be that hostels or bed and breakfasts around the country. They said that there were 3 factors that we should continue to measure. One is whether the tenants are over time getting more access to the private rented sector through their tenants’ so we measure things like their sustainment of the tenancy as a measure of whether that’s working well for them. Secondly, whether they are making progress towards training and employment whilst they’re tenants, so we measure that with our homelessness charity partners. And thirdly, whether they are over time more resilient to falling back into homelessness, and that is measured in a number of ways, particularly through whether they are re-establishing social connections, managing their finances well, looking after the property, etc. So these are all very granular measures that we can put together and over time build a picture of whether the impact in that particular aspect of homelessness is happening through the investment funds and the property it delivers. So for the Resonance Supported Homes Fund, which focuses on adults with learning disability, we worked very closely with learning disability charities, and really what they were focused on is establishing the right property for very specific individual needs. So this is a fund which targets individual properties to individual needs. So a lot of the impact measures for that are around whether the property has met the needs of that specific individual as a potentially a home for life, which is a distinction between this fund and the others that we run where people wouldn’t necessarily stay in the property for their whole life. So there’s a lot of measurement in the Supported Homes Fund around the suitability of the property for that particular tenant, whether they feel that they do actually have now a stable home and also particularly one that’s connected to friends and family nearby. Often one of the things this fund is seeking to address is the risk that otherwise people with learning disability can be housed a long, long way away from friends and family with more institutional setting. So that’s what the fund is seeking to address and that’s what it measures. And then finally for the Women in Safe Homes Fund. This was a fund that was specifically focused on the needs of women, and therefore again, the measures were developed with women’s sector organizations, but they focus primarily on whether the particular intervention for women is working, particularly, for example, in women fleeing domestic abuse, whether they feel that they have a safe home, even if it’s a temporary one, in which they can find refuge. And then we also measure the impact on the organizations we work with as well, because one of the impacts that fund is seeking to have is to allow women’s sector organizations over time to scale up their ability to provide this type of housing. And so in some cases, it’s about helping smaller women’s sector organizations develop that housing expertise, and we measure that as well.
Aoifinn Devitt: And two questions come to mind just in relation to this. One is, These segments of the population you mentioned are clearly vulnerable areas. And sometimes when there is an enterprise that is also looking to generate a profit from working with these segments, and we’ve seen this with some of the, say, retirement homes, there can be obviously a heightened awareness of the need for fair treatment and to avoid abuse. How do you screen for that in the partners you work with and just in terms of headline risk potentially?
Simon Chisholm: Yep. I think this really comes down to one of the key issues at the moment, which is differentiating different forms of impact investment and establishing what is good and best practice. So I think you’re absolutely right. For us, at the foundation of it, it’s choosing the right partners. And so as Resonance, we have a very well-established due diligence process for any partner, for any of our property funds. And that starts with a deep dive into their governance, but also into the way that they seek to achieve outcomes for their tenants, whether indeed they We are interested in measuring and improving those, and that due diligence will be our kind of absolute minimum in order to take on a partner for the funds. But then over time, this focus we have on impact measurement and management means that there’s a constant cycle of using the information we get back to understand whether the outcomes are happening for tenants, if there are any problems, how we can address them with our partners. So it’s a very dynamic relationship rather than just a one-off. Due diligence. And I think the final factor is really creating the right incentives and risk allocations in the relationship with those partners. So we put a lot of effort into designing the leases on these properties such that they genuinely work for both the investor and the leasing partner, right down to the details of whether the rental is linked to the local housing allowance, which is often the rental that those organizations will be receiving, to ensure that they don’t have a kind of mismatch between the rents they receive and amounts that they’re due under the lease.
Aoifinn Devitt: Very interesting. And the second point is around the kind of investors for whom this resonates particularly, I suppose, viscerally. Do you find that perhaps there are investors, say, who have a mission at their organization that also aligns with your mission, or do you find that this has broad-based appeal?
Simon Chisholm: We’re finding increasingly broad-based appeal. I think there’s no doubt some of the early funds we launched in the earlier days were backed by, shall we say, the catalytic impact investors like foundations who invest their endowment for return, but also have have an inherent mission to what they want to achieve. But over the years, we’ve seen a lot of investment from local authorities who obviously need to invest with an eye to good returns on public money. And in the last few years, the scale of particularly the homelessness property funds has meant that we’ve attracted institutional pension fund investors, particularly from the local government pension schemes.
Aoifinn Devitt: Well, let’s move to the industry as a whole now. So you’re a leader in an asset management firm. What’s at the forefront of your mind as you look at the shape of the asset management industry today and how it’s evolving?
Simon Chisholm: I think there are many things obviously that are driving the industry. One of the key ones has been the massive focus on environmental goals, which even for a social impact investment strategy have to be right at the core of what we’re doing now. There’s always been a really good alignment between social impact objectives and environmental goals. I mean, And as a very basic point, the more energy efficient our properties are, the more affordable they are for those tenants that we’re seeking to help in their progression. So there’s always been a good focus on the alignment between those things, but I think there’s no doubt that the intentional use of measurement and targets and standards to improve energy efficiency and environmental aspects of our investment is right at the forefront of our minds at the moment.
Aoifinn Devitt: And obviously one of the aspects of working with the vulnerable populations you do is around inclusion. And that’s an issue we face in the industry itself too. What are your thoughts around the current levels of diversity in the industry and inclusion too, and what we can do about it?
Simon Chisholm: Yes, I think there has been some progress, but I still think that obviously this is something that needs a lot of continuous improvement. And I don’t think the impact investing sector as a whole can be complacent about that issue of diversity. So one of the really positive things we’ve seen recently is the Equality Impact Investing Task Force, which Resonance is a member of and we try to contribute to. And that has a number of useful tools that are helping us and others really focus in on that issue of diversity and inclusion. And there’s a really good website that people could access for that if they’re interested. But I’m happy to say Resonance has a diverse board itself, and we’ve got a really strong internal working group that helps us to try to improve continuously on that.
Aoifinn Devitt: And we’ll certainly put a link to that website in the show notes, just in case any of our listeners want to read more about that. But let’s take inclusion now to more of a kind of a structural level. You are, I suppose, a smaller firm in the industry, and at one point you were an emerging firm. How do you think the industry is evolving in terms of size and these perhaps the benefits of scale that accrue to large firms? And how do you think it is in terms of getting airtime, investor airtime as well, or either consultant airtime for a smaller firm?
Simon Chisholm: That’s always going to be a challenge. I think there’s no doubt 5 years ago, some of our strategies were not at sufficient scale for it to be easy to make that engagement. I think that’s changed now. And particularly with our homelessness property funds, the scale of investment, if you look at the issue across the UK, there’s a £20 billion property need that can be addressed through this investment. So it’s very definitely at institutional scale. Obviously, one of the biggest challenges is preserving strategies which are really deeply rooted in an effective impact model as things scale up. So that’s something we’re very focused on at the minute with our institutional homelessness property fund strategy. We’ve traditionally, and we continue to use single unit acquisitions for that, but we are looking next year to scale that further with the availability of a number of portfolio acquisitions, for example, so we can add scale to that, but not compromising the choice of the right properties.
Aoifinn Devitt: Well, let’s go back to your personal story now. So you’ve had a long career in investment banking and now an impact-focused investment manager for some time. What would you say, were there any setbacks or challenges along that trajectory or any investment mistakes even that you’ve learned lessons from?
Simon Chisholm: I guess thinking back over some of the lessons learned, one is obviously perseverance, just keep pushing at things and sometimes you can get doors to open that you didn’t expect. I think another is really a kind of constant learning attitude and a real feedback loop so that if things do go wrong, one can get a real kind of understanding of the root cause of that and really go back and try and fix that for the future. And then I guess thirdly, really looking out for opportunity that comes with adversity. But there’s, I think, often a need to look for that opportunity rather than just focus on the adverse situation that you’re in. So I think all of those I’ve found over the years.
Aoifinn Devitt: And given your work and impact, you probably work with many non-finance professionals. Are there any particular ways of working or insights that you’ve gained from some of the non-finance professionals, whether it be within the homelessness sector or working with adults with learning disabilities, that you’ve taken to maybe enrich the work that you do within finance?
Simon Chisholm: Yes, I think the first thing to say is that the levels of professionalism that one sees within the social enterprise sector more broadly are so high because very often they are clearly dealing with what can often be life and death situations. And so really just the professional approach that’s taken to ensuring that a tenancy works for an individual, that if there are support needs for that individual, that they are kind of properly assessed and put into place. I think that kind of rigour has a real— yeah, I think there’s an investment management world needs to be humble and say that there’s a lot of professionalism out there and that’s something we can bring back into our own work.
Aoifinn Devitt: And do you find that the people you’ve worked with in these sectors are very mission-driven? So obviously we’ve seen this through COVID, massive disruption in our way of working, but people who are mission-driven are going to get the work done no matter what, regardless of the disruption and the circumstances. Have you seen that that has been a factor?
Simon Chisholm: Yes, I think there’s that, which is, as you say, a kind of force that can keep people working at things even in very adverse circumstances and bring them through the other side. And I think there’s also a really innovative spirit within the kind of social enterprise community across the UK. Often they’re developing new models for doing things which ultimately can be highly investable and bring new approaches. And the approach we’ve taken to property investment over the last 10 years and this single-unit acquisition strategy really was born out out of our social enterprise partners saying to us that they needed that kind of pepper-potted, shall we say, portfolio around major UK cities. And that drove us to have a different approach to property investment perhaps than traditional residential property funds. So it’s interesting to see the way that that social innovation can lead through to different investment strategies.
Aoifinn Devitt: And maybe then looking back further, whether it be all the way back to your school days or college days or professional development Were there any other key people who had an impact on you and how you see the world?
Simon Chisholm: One person that I would often cite as an influence is actually one of my former Rothschild colleagues. There’s a guy called Keith Palmer, and he worked in the same sector as me, but about 20 years ago set up something called Infraco, which was actually an early form of impact investment focused on encouraging investment in developing countries’ infrastructure where it was really too early or risky for the private sector, but using investment models so that that money could be recycled. And that made a big impression on me at the time. And interestingly, while I didn’t work very closely with Keith personally, I knew him as an individual. And I think it was that kind of— sometimes it’s the inspiration you just see from afar, which got me thinking about purpose of investment.
Aoifinn Devitt: It’s really interesting to be brought back to the purpose, I think, in an industry like this, which can be so volatile and so driven by mercenary considerations, especially during a down period. Having a purpose to guide us can actually be the sticking point that is key. When looking at either the advice from this individual or in other interactions you’ve had, is there any one piece of advice that you’ve received or any creed or motto that you’ve let govern yourself?
Simon Chisholm: Well, as a Christian, I have a really clear creed in my Christian faith. But actually, I think one of the most reassuring aspects of that is not really all about me. Me and what I do, but really all about what God has done through Jesus Christ. So I think that perspective frees me to be essentially just grateful for life, for work, and for any opportunity I get to contribute positively to the lives of others.
Aoifinn Devitt: That’s very moving. And when you look back at your younger self, is there— perhaps starting on a career in investment banking, now that you are firmly in the impact space, and are at the helm of a firm. Is there anything that you know now that perhaps you wish you had known earlier?
Simon Chisholm: Oh gosh, probably 3 things I would have said to my younger self. I think the first is surround yourself with people you respect, but who are going to hold you to account. And I’ve been fortunate in many respects to find people like that. I think the second is really to value diverse opinions, often from very unexpected places. And I’ve had the benefit of many of those over the years. And I think the third is something that I always saw as a great feature of my dad, which is to stay curious about the world. And he lived till 98 and he was still curious right up until his last days.
Aoifinn Devitt: Well, that’s some wonderful words there. I’m going to slip in a few extra questions because I’m curious a little bit now. Just the work you’re doing, and I suppose where would you see as being the next frontier? You have 3 specific areas of impact which I think are not being addressed by other firms really much at all, so really inspiring to see these areas of impact being addressed. Will you have any bit of crystal ball here as to where perhaps there are other areas that impact might be possible?
Simon Chisholm: There are several that we have under review, and really we will be driven by that feature of our strategy I mentioned, is when we see an effective model for addressing them, then that’s when we’ll get interested in backing it with investment. But I think one of the areas I would definitely cite is the aging population and ways of investing that can both improve outcomes for people who are older and have support needs, but also potentially move away from models of segregation where older people are put into environments away from the rest of society. So I think there’s some very interesting models there, and I think we would We’d love to find ways of backing social enterprises who are developing those.
Aoifinn Devitt: And my last question is, I don’t know if you would see it this way, but I do see your business model as being somewhat disruptive in that it is disrupting, at least to me, the general understanding sometimes as to what investment firms are designed to do, which is purely pursue profit and returns. Do you see that disruptive enterprises like yourselves are helping finance perhaps to change its appeal to new generations or to maybe overhaul its image?
Simon Chisholm: I really hope we’re getting beyond overhauling images, and I think obviously we have to be humble and say we’re just pursuing one approach to impact investing, and there are multiple approaches people are taking to become more intentional about the way that investment is made for the benefit of people and planet. So we don’t have all of the answers, but I think there is something about getting on and doing it, which hopefully over time can change market motivations. And that’s definitely one of Resonance’s missions and visions as an organization, is that markets will become more attuned to that bigger picture for investment over time.
Aoifinn Devitt: Well, thank you so much, Simon. It’s really been an inspiration to hear the work that Resonance is doing, not only the thousands of lives you’ve already impacted by the numbers you’ve shown and the homes you’ve provided, But also, I think by demonstrating what finance can do in an impact-driven business model like this, I think it will have that effect of basically having impact on thousands more lives, whether through your own organization or through others who look at your model and see that it can be done. So thank you for providing this very, I think, vital inspiration here in the industry and for sharing your insights with us.
Simon Chisholm: Well, thank you. It’s been a great pleasure and thank you for your questions.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces podcast. If you liked what you heard and would like to tune in to hear more inspiring investors on their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
Aoifinn Devitt: The first series of 2022 is brought to you with the kind support of Herd Capital, a Chicago-based asset manager that invests in public equities in the technology, media, telecommunications, financial, and industrial sectors. The firm was founded in 2011 and manages assets via a long-short fund and a long-only fund. How can finance bridge the gap to house some of society’s most vulnerable members? Let’s find out about place-based impact next. I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by Simon Chisholm, who is Chief Investment Officer at Resonance Limited, an investment manager focused on achieving social and place-based impact. It currently runs funds focused on three themes: homelessness, housing for vulnerable women, and housing for adults with learning differences. It has over 20 years of an impact track record and has housed over 2,300 people in 1,000 properties since inception. Simon previously spent over 16 years in investment banking and also holds a number of board roles. Welcome, Simon. Thanks for joining me today.
Simon Chisholm: It’s a pleasure.
Aoifinn Devitt: So let’s start with your background and career journey. Where did you grow up? What did you study and how did you come to enter the world of investing?
Simon Chisholm: So I spent my early years growing up in Buckinghamshire and also Sussex, where I went to an interesting school called Christ’s Hospital, which has a fascinating history. It was actually a charitable foundation of Edward VI for the poor children of London. So you could actually say it’s an early social enterprise. I then moved on from there and studied economics and politics at Durham, and then on and went on and did a master’s in economics at Bristol. And that really kind of then took me through to joining Rothschild in the mid-’90s in London on their graduate intake. And I spent 16 years with them in London and Hong Kong, working on a range of transactions, mainly in the infrastructure sector. And I guess what kind of attracted me initially, to be honest, into investment were the people. And there were some really interesting people working at Rothschild at that time had really diverse backgrounds, former economics lecturer, nuclear physicist, geologists. They weren’t your typical stereotypical investment bankers. And I think that was one of the things that got me into the company.
Aoifinn Devitt: Fascinating. And can you tell us a little bit now about your work at Resonance?
Simon Chisholm: So I joined Resonance now 10 years ago as Chief Investment Officer to help its founder, Daniel Brewer, build up our impact fund management business, and that really was based at the time on the previous 10 years which Daniel and residents had spent as real pioneers in UK impact investment. So 10 years on, we now manage a range of impact investment funds. The largest are our property funds, and those really try and do two things. Firstly, deliver good property-style returns with some long-term inflation-correlated income and diverse exposure to long-term UK resi property appreciation. But also importantly to achieve a targeted and measurable social impact on some specific issues through partnering with, with specialized housing and support providers. So that’s really 3 fund strategies now focused on homelessness, on learning disability, and on vulnerable women. And it’s a team of 50 now across 3 UK locations which combine a range of investment property and social enterprise skills.
Aoifinn Devitt: Quite a bit to dig into there. So let’s go back a bit to the concept of impact investing when you joined Resonance Capital, how well it was articulated then, and how do you think that’s evolved in terms of investors’ understanding as to what impact-based investing means?
Simon Chisholm: Yeah, I was first interested in impact investing myself through my work as a trustee of a homelessness charity. And it was really in that time I began to see them use business models to break down some aspects of the homelessness problem. A social enterprise approach. And that was what convinced me that investment into that type of social enterprise could be highly impactful. But when I joined Resonance, I guess 10 years ago, impact investing, I think, was beginning to be understood as distinct from ESG. Big Society Capital had been recently founded at a similar time and has since really helped, I think, champion this market in the UK. And I think 10 years ago, perhaps there was still a bit of confusion about the spectrum of capital, as it’s now termed, and whether impact investing necessarily meant trading off returns. But now I would say 10 years later, institutions are confidently allocating to impact and moving beyond ESG in the knowledge that they don’t need to trade off good risk-adjusted returns.
Aoifinn Devitt: Place-based impacts as a focus. Why did you choose those particular themes? And do you think that they are well covered elsewhere? Do you think they’re well understood as being themes that are necessary to target?
Simon Chisholm: Yeah, I mean, I think there are many ways that you can approach impact investing, and no one is saying there’s a right and a wrong, but Resonance has always had a very simple strategy there, which is to start with the social enterprise. So we saw a really effective social enterprise model in homelessness 10 years ago, which really needed access to residential property at scale in order to break down that aspect of the homelessness problem. And so the early impact property funds were built around that social enterprise model and have scaled that up very significantly. We then really quickly realised with other housing providers and support providers that there was a way of adapting this model to other needs, including adults with learning disability. So we worked with organisations who knew what was needed in that space to you design, know, a different fund with some different characteristics that would, would best address that need. And then most recently, through the Women in Safe Homes Fund. We have partnered both with women’s sector organizations across the UK and also as fund manager with Patron Capital to deliver a fund that’s focused on those specific needs, particularly women fleeing domestic abuse and coming out of prison.
Aoifinn Devitt: And I suppose one of the questions would be, how do you measure impact? And if you wouldn’t mind going through maybe one by one each of your themes in terms of how you measure the impact and how that maybe gets calibrated by the investors?
Simon Chisholm: Sure. For us, it’s really important that impact measurement is also tied to impact management. So can you use the information that’s coming back to improve the impact of the model over time? So we always, for each of the funds that we launch, work closely with the organizations who understand what makes it work for tenants in those different circumstances to establish the metrics that they think will tell us that. So for example, in homelessness, we worked in the early days of those funds very closely with homelessness charities who really said this type of move-on accommodation, which is providing the opportunity for people to get back into private rented accommodation often who are stuck in temporary accommodation, be that hostels or bed and breakfasts around the country. They said that there were 3 factors that we should continue to measure. One is whether the tenants are over time getting more access to the private rented sector through their tenants’ so we measure things like their sustainment of the tenancy as a measure of whether that’s working well for them. Secondly, whether they are making progress towards training and employment whilst they’re tenants, so we measure that with our homelessness charity partners. And thirdly, whether they are over time more resilient to falling back into homelessness, and that is measured in a number of ways, particularly through whether they are re-establishing social connections, managing their finances well, looking after the property, etc. So these are all very granular measures that we can put together and over time build a picture of whether the impact in that particular aspect of homelessness is happening through the investment funds and the property it delivers. So for the Resonance Supported Homes Fund, which focuses on adults with learning disability, we worked very closely with learning disability charities, and really what they were focused on is establishing the right property for very specific individual needs. So this is a fund which targets individual properties to individual needs. So a lot of the impact measures for that are around whether the property has met the needs of that specific individual as a potentially a home for life, which is a distinction between this fund and the others that we run where people wouldn’t necessarily stay in the property for their whole life. So there’s a lot of measurement in the Supported Homes Fund around the suitability of the property for that particular tenant, whether they feel that they do actually have now a stable home and also particularly one that’s connected to friends and family nearby. Often one of the things this fund is seeking to address is the risk that otherwise people with learning disability can be housed a long, long way away from friends and family with more institutional setting. So that’s what the fund is seeking to address and that’s what it measures. And then finally for the Women in Safe Homes Fund. This was a fund that was specifically focused on the needs of women, and therefore again, the measures were developed with women’s sector organizations, but they focus primarily on whether the particular intervention for women is working, particularly, for example, in women fleeing domestic abuse, whether they feel that they have a safe home, even if it’s a temporary one, in which they can find refuge. And then we also measure the impact on the organizations we work with as well, because one of the impacts that fund is seeking to have is to allow women’s sector organizations over time to scale up their ability to provide this type of housing. And so in some cases, it’s about helping smaller women’s sector organizations develop that housing expertise, and we measure that as well.
Aoifinn Devitt: And two questions come to mind just in relation to this. One is, These segments of the population you mentioned are clearly vulnerable areas. And sometimes when there is an enterprise that is also looking to generate a profit from working with these segments, and we’ve seen this with some of the, say, retirement homes, there can be obviously a heightened awareness of the need for fair treatment and to avoid abuse. How do you screen for that in the partners you work with and just in terms of headline risk potentially?
Simon Chisholm: Yep. I think this really comes down to one of the key issues at the moment, which is differentiating different forms of impact investment and establishing what is good and best practice. So I think you’re absolutely right. For us, at the foundation of it, it’s choosing the right partners. And so as Resonance, we have a very well-established due diligence process for any partner, for any of our property funds. And that starts with a deep dive into their governance, but also into the way that they seek to achieve outcomes for their tenants, whether indeed they We are interested in measuring and improving those, and that due diligence will be our kind of absolute minimum in order to take on a partner for the funds. But then over time, this focus we have on impact measurement and management means that there’s a constant cycle of using the information we get back to understand whether the outcomes are happening for tenants, if there are any problems, how we can address them with our partners. So it’s a very dynamic relationship rather than just a one-off. Due diligence. And I think the final factor is really creating the right incentives and risk allocations in the relationship with those partners. So we put a lot of effort into designing the leases on these properties such that they genuinely work for both the investor and the leasing partner, right down to the details of whether the rental is linked to the local housing allowance, which is often the rental that those organizations will be receiving, to ensure that they don’t have a kind of mismatch between the rents they receive and amounts that they’re due under the lease.
Aoifinn Devitt: Very interesting. And the second point is around the kind of investors for whom this resonates particularly, I suppose, viscerally. Do you find that perhaps there are investors, say, who have a mission at their organization that also aligns with your mission, or do you find that this has broad-based appeal?
Simon Chisholm: We’re finding increasingly broad-based appeal. I think there’s no doubt some of the early funds we launched in the earlier days were backed by, shall we say, the catalytic impact investors like foundations who invest their endowment for return, but also have have an inherent mission to what they want to achieve. But over the years, we’ve seen a lot of investment from local authorities who obviously need to invest with an eye to good returns on public money. And in the last few years, the scale of particularly the homelessness property funds has meant that we’ve attracted institutional pension fund investors, particularly from the local government pension schemes.
Aoifinn Devitt: Well, let’s move to the industry as a whole now. So you’re a leader in an asset management firm. What’s at the forefront of your mind as you look at the shape of the asset management industry today and how it’s evolving?
Simon Chisholm: I think there are many things obviously that are driving the industry. One of the key ones has been the massive focus on environmental goals, which even for a social impact investment strategy have to be right at the core of what we’re doing now. There’s always been a really good alignment between social impact objectives and environmental goals. I mean, And as a very basic point, the more energy efficient our properties are, the more affordable they are for those tenants that we’re seeking to help in their progression. So there’s always been a good focus on the alignment between those things, but I think there’s no doubt that the intentional use of measurement and targets and standards to improve energy efficiency and environmental aspects of our investment is right at the forefront of our minds at the moment.
Aoifinn Devitt: And obviously one of the aspects of working with the vulnerable populations you do is around inclusion. And that’s an issue we face in the industry itself too. What are your thoughts around the current levels of diversity in the industry and inclusion too, and what we can do about it?
Simon Chisholm: Yes, I think there has been some progress, but I still think that obviously this is something that needs a lot of continuous improvement. And I don’t think the impact investing sector as a whole can be complacent about that issue of diversity. So one of the really positive things we’ve seen recently is the Equality Impact Investing Task Force, which Resonance is a member of and we try to contribute to. And that has a number of useful tools that are helping us and others really focus in on that issue of diversity and inclusion. And there’s a really good website that people could access for that if they’re interested. But I’m happy to say Resonance has a diverse board itself, and we’ve got a really strong internal working group that helps us to try to improve continuously on that.
Aoifinn Devitt: And we’ll certainly put a link to that website in the show notes, just in case any of our listeners want to read more about that. But let’s take inclusion now to more of a kind of a structural level. You are, I suppose, a smaller firm in the industry, and at one point you were an emerging firm. How do you think the industry is evolving in terms of size and these perhaps the benefits of scale that accrue to large firms? And how do you think it is in terms of getting airtime, investor airtime as well, or either consultant airtime for a smaller firm?
Simon Chisholm: That’s always going to be a challenge. I think there’s no doubt 5 years ago, some of our strategies were not at sufficient scale for it to be easy to make that engagement. I think that’s changed now. And particularly with our homelessness property funds, the scale of investment, if you look at the issue across the UK, there’s a £20 billion property need that can be addressed through this investment. So it’s very definitely at institutional scale. Obviously, one of the biggest challenges is preserving strategies which are really deeply rooted in an effective impact model as things scale up. So that’s something we’re very focused on at the minute with our institutional homelessness property fund strategy. We’ve traditionally, and we continue to use single unit acquisitions for that, but we are looking next year to scale that further with the availability of a number of portfolio acquisitions, for example, so we can add scale to that, but not compromising the choice of the right properties.
Aoifinn Devitt: Well, let’s go back to your personal story now. So you’ve had a long career in investment banking and now an impact-focused investment manager for some time. What would you say, were there any setbacks or challenges along that trajectory or any investment mistakes even that you’ve learned lessons from?
Simon Chisholm: I guess thinking back over some of the lessons learned, one is obviously perseverance, just keep pushing at things and sometimes you can get doors to open that you didn’t expect. I think another is really a kind of constant learning attitude and a real feedback loop so that if things do go wrong, one can get a real kind of understanding of the root cause of that and really go back and try and fix that for the future. And then I guess thirdly, really looking out for opportunity that comes with adversity. But there’s, I think, often a need to look for that opportunity rather than just focus on the adverse situation that you’re in. So I think all of those I’ve found over the years.
Aoifinn Devitt: And given your work and impact, you probably work with many non-finance professionals. Are there any particular ways of working or insights that you’ve gained from some of the non-finance professionals, whether it be within the homelessness sector or working with adults with learning disabilities, that you’ve taken to maybe enrich the work that you do within finance?
Simon Chisholm: Yes, I think the first thing to say is that the levels of professionalism that one sees within the social enterprise sector more broadly are so high because very often they are clearly dealing with what can often be life and death situations. And so really just the professional approach that’s taken to ensuring that a tenancy works for an individual, that if there are support needs for that individual, that they are kind of properly assessed and put into place. I think that kind of rigour has a real— yeah, I think there’s an investment management world needs to be humble and say that there’s a lot of professionalism out there and that’s something we can bring back into our own work.
Aoifinn Devitt: And do you find that the people you’ve worked with in these sectors are very mission-driven? So obviously we’ve seen this through COVID, massive disruption in our way of working, but people who are mission-driven are going to get the work done no matter what, regardless of the disruption and the circumstances. Have you seen that that has been a factor?
Simon Chisholm: Yes, I think there’s that, which is, as you say, a kind of force that can keep people working at things even in very adverse circumstances and bring them through the other side. And I think there’s also a really innovative spirit within the kind of social enterprise community across the UK. Often they’re developing new models for doing things which ultimately can be highly investable and bring new approaches. And the approach we’ve taken to property investment over the last 10 years and this single-unit acquisition strategy really was born out out of our social enterprise partners saying to us that they needed that kind of pepper-potted, shall we say, portfolio around major UK cities. And that drove us to have a different approach to property investment perhaps than traditional residential property funds. So it’s interesting to see the way that that social innovation can lead through to different investment strategies.
Aoifinn Devitt: And maybe then looking back further, whether it be all the way back to your school days or college days or professional development Were there any other key people who had an impact on you and how you see the world?
Simon Chisholm: One person that I would often cite as an influence is actually one of my former Rothschild colleagues. There’s a guy called Keith Palmer, and he worked in the same sector as me, but about 20 years ago set up something called Infraco, which was actually an early form of impact investment focused on encouraging investment in developing countries’ infrastructure where it was really too early or risky for the private sector, but using investment models so that that money could be recycled. And that made a big impression on me at the time. And interestingly, while I didn’t work very closely with Keith personally, I knew him as an individual. And I think it was that kind of— sometimes it’s the inspiration you just see from afar, which got me thinking about purpose of investment.
Aoifinn Devitt: It’s really interesting to be brought back to the purpose, I think, in an industry like this, which can be so volatile and so driven by mercenary considerations, especially during a down period. Having a purpose to guide us can actually be the sticking point that is key. When looking at either the advice from this individual or in other interactions you’ve had, is there any one piece of advice that you’ve received or any creed or motto that you’ve let govern yourself?
Simon Chisholm: Well, as a Christian, I have a really clear creed in my Christian faith. But actually, I think one of the most reassuring aspects of that is not really all about me. Me and what I do, but really all about what God has done through Jesus Christ. So I think that perspective frees me to be essentially just grateful for life, for work, and for any opportunity I get to contribute positively to the lives of others.
Aoifinn Devitt: That’s very moving. And when you look back at your younger self, is there— perhaps starting on a career in investment banking, now that you are firmly in the impact space, and are at the helm of a firm. Is there anything that you know now that perhaps you wish you had known earlier?
Simon Chisholm: Oh gosh, probably 3 things I would have said to my younger self. I think the first is surround yourself with people you respect, but who are going to hold you to account. And I’ve been fortunate in many respects to find people like that. I think the second is really to value diverse opinions, often from very unexpected places. And I’ve had the benefit of many of those over the years. And I think the third is something that I always saw as a great feature of my dad, which is to stay curious about the world. And he lived till 98 and he was still curious right up until his last days.
Aoifinn Devitt: Well, that’s some wonderful words there. I’m going to slip in a few extra questions because I’m curious a little bit now. Just the work you’re doing, and I suppose where would you see as being the next frontier? You have 3 specific areas of impact which I think are not being addressed by other firms really much at all, so really inspiring to see these areas of impact being addressed. Will you have any bit of crystal ball here as to where perhaps there are other areas that impact might be possible?
Simon Chisholm: There are several that we have under review, and really we will be driven by that feature of our strategy I mentioned, is when we see an effective model for addressing them, then that’s when we’ll get interested in backing it with investment. But I think one of the areas I would definitely cite is the aging population and ways of investing that can both improve outcomes for people who are older and have support needs, but also potentially move away from models of segregation where older people are put into environments away from the rest of society. So I think there’s some very interesting models there, and I think we would We’d love to find ways of backing social enterprises who are developing those.
Aoifinn Devitt: And my last question is, I don’t know if you would see it this way, but I do see your business model as being somewhat disruptive in that it is disrupting, at least to me, the general understanding sometimes as to what investment firms are designed to do, which is purely pursue profit and returns. Do you see that disruptive enterprises like yourselves are helping finance perhaps to change its appeal to new generations or to maybe overhaul its image?
Simon Chisholm: I really hope we’re getting beyond overhauling images, and I think obviously we have to be humble and say we’re just pursuing one approach to impact investing, and there are multiple approaches people are taking to become more intentional about the way that investment is made for the benefit of people and planet. So we don’t have all of the answers, but I think there is something about getting on and doing it, which hopefully over time can change market motivations. And that’s definitely one of Resonance’s missions and visions as an organization, is that markets will become more attuned to that bigger picture for investment over time.
Aoifinn Devitt: Well, thank you so much, Simon. It’s really been an inspiration to hear the work that Resonance is doing, not only the thousands of lives you’ve already impacted by the numbers you’ve shown and the homes you’ve provided, But also, I think by demonstrating what finance can do in an impact-driven business model like this, I think it will have that effect of basically having impact on thousands more lives, whether through your own organization or through others who look at your model and see that it can be done. So thank you for providing this very, I think, vital inspiration here in the industry and for sharing your insights with us.
Simon Chisholm: Well, thank you. It’s been a great pleasure and thank you for your questions.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces podcast. If you liked what you heard and would like to tune in to hear more inspiring investors on their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
