The social impact fund for emergency accommodation

The “Hémisphère” fund was set up in 2017 by AMPERE Gestion to acquire and convert around 100 low-cost hotels into 10,000 units of emergency accommodation. It is the first ever large-scale social impact bond.

 

Meeting the need for emergency accommodation

Central government is being increasingly asked to help with temporary accommodation for people experiencing difficulties and is having to pay for more and more overnight stays in private hotels. However, this situation has now reached its limits and SNI Group and AMPERE Gestion have set up “Hémisphère” to develop a more appropriate accommodation solution. It brings together six French institutional investors who are putting up €100 million in equity in the first large-scale social impact fund of its kind. Its investment capacity will be rounded out by a loan from the CEB, the Council of Europe Development Bank.

Hémisphère’s mission is to create 10,000 units of emergency accommodation which will then be operated by Adoma. Thanks to the acquisition of a large portfolio of low-cost hotels, over 6,000 units will be in service by June 2017.

 

Adoma, a strategic partner

Adoma, France’s leading provider of emergency accommodation and a subsidiary of SNI, operates the properties – mostly low-cost hotels that have been converted into accommodation centres – and provides social support to residents.

It was set up in 1956 to cater to migrant workers and was one of the leading operators involved in clearing slums on the outskirts of major French cities. Both its missions and its clientèle have evolved over the years. Adoma currently houses over 72,000 people experiencing difficulties who do not have access to conventional housing, e.g., young people in social integration programmes, workers in insecure employment, people on minimum welfare benefits, migrant workers, single-parent families, etc. In addition to accommodation, Adoma also provides social support. It has over 2,300 employees supporting residents day-in, day-out in their pursuit of social integration.

 

A new model for social action

Social impact bonds originated in the UK and are designed to get private sector investors to fund social programmes and tie their remuneration to improved social outcomes. They have been used to finance initiatives in areas such as child protection, the prevention of re-offending, social integration and creating pathways towards employment.

Under this approach, part of the remuneration paid to Hémisphère investors is tied to qualitative social outcomes such as the proportion of children attending school, effective access to social security, or the number of programme participants placed in permanent accommodation. The extent to which the social outcomes have actually been achieved is measured by an independent expert. Aside from the incentive-based nature of this arrangement, the principle of independent evaluation provides an additional guarantee of transparency and efficient management.