Manchester: This relationship could shelter 200 homeless people

Forget stocks. These buyers are adding £1.8 million ($2.4 million) toward shelter for the homeless.

Bridges Fund Management has backed a program that may finance living spaces for 200 homeless people in Manchester, England.

The investment comes from the firm’s Public Impact Bond Fund, a £25 million ($33 million) pool of money raised from investors including foundations and wealthy individuals.

The target is to help homeless people off the streets in the town, a former professional powerhouse, while also making a return.

Social bonds work such as this: Investors put money towards a program made to help society or the environment. They only make money if this program works.

In this case, success means the homeless must stay off the roads for two years.

“These programs will work with very vulnerable people, so they are incredibly difficult to provide and the outcomes happen to be fairly unpredictable,” said Andrew Levitt, a partner at Bridges.

Homelessness is on the rise found in England, and Manchester is among the cities most affected.

Roughly 200 people were sleeping in the streets around Manchester on any sort of given night in past due 2016, according to official statistics. But charities that use homeless people say the problem could be much bigger.

Manchester Mayor Andy Burnham, who has pledged 15% of his own salary to tackle homelessness, said that in addition to accommodation, this program will provide individuals with intensive health insurance and emotional support. They will also receive practical training and employment services.

The program will be available to people who’ve slept on the streets at least six times in the past two years.

Related: These super-rich family members are trading their fortunes to help others

Public bonds are increasingly utilized by governments to pay for services.

Levitt said they often times result in better outcomes than standard government agreements, where money is paid upfront.

“It gives services the freedom and the flexibility to adapt and enhance their system as they complement, and a solid incentive to provide better-than-expected benefits,” he said.

Levitt said his firm’s portfolio, which includes committed to 20 social bonds over the U.K., can be on track going to its targets and make money in four years. He expects the Manchester job to deliver “a small return.”

“With public impact bonds, the desire is the project offers its influence, and you finish up with your cash back plus somewhat more — that you can after that go and choose new project,” Levitt said.

Read more on: