Maybe it’s providence, maybe we’ve actually become friends

Apr 04 2022 · 10 minute read

This article is text that was first published in Philanthropy Impact Issue 24 | Autumn 2020

If the philanthropy and impact investing world is to live up to the promise of changing the world for the better, then the toxic behaviours the investment world has become used to must die I remember sitting in my family living room invited by my Dad for my opinion on where he should invest some savings. Nigel was coming round. This was the late 1980s, I was in my mid-teens and I knew nothing about investments. Remember the time when an independent financial advisor actually turned up to your house to talk about what you might do with a small £10,000 savings pot with tailored advice? Now, of course, it is all but impossible to get tailored investment advice unless you have in excess of £250,000 of liquid cash.

Nigel told us about this new ethical fund called Friends Provident and it felt good to put some money into an organisation that seemed to take some sort of responsibility for its actions. I’m pretty sure I added no value to the conversation, I don’t remember any of the other options but I was sufficiently taken by the proposition that a few years later when I managed to save a little cash in my gap year I too invested my PEP (anyone else remember them? They were the ISA predecessor) into Friends Provident.

I slightly naively thought that our money was somehow now available to those fine companies in the FTSE 250 and beyond to help them expand into grand new adventures. It wasn’t until much later that I discovered that my cash had just been used to acquire shares (and probably not even real shares but some kind of shadow share) from someone else who wanted to sell theirs. It felt like the moment my 10-year-old sister handed her limited edition commemorative £2 coin for safe keeping into the bank, thinking that the same actual £2 coin was going to be there when she asked for it back in a few years’ time. We had tried to explain, but she was having none of it.

“I slightly naively thought that our money was somehow now available to those fine companies in the FTSE 250 and beyond to help them expand into grand new adventures.”

I think I had an innate belief that my investment was helping to make the world a better a place, but actually the system was really just set up to help me — enabling me to share in the profits of the companies. I was really disappointed; I expected more. Years later, a kindly uncle gave my children a piggy bank. It had four transparent sections in it. Saving, Investing, Giving and Spending. Brilliant, now I could have a conversation with my then fiveyear-old about the difference between saving (set aside for me just in case) and investing (for something beyond me). She just kept filling up the other two and I comforted myself that she was actually still sort of saving if only to spend in a few months and investing beyond herself as a budding philanthropist.


The investment industry thrives on its opaqueness and complexity. Derivatives and hedging, options and futures are more than I care to understand. I’m sure they may have their place, but I always struggle to really see the point. Does my investing in those things do anything useful for anyone beyond speculating about making a financial return? Does it add or create real value beyond a financial return to me? More recently, I watched a documentary about the 2008 credit crash, which at one point highlighted that an investment ‘professional’ had exuded so much confidence that despite using entirely unintelligible ‘cross-collateralised’ jargon for over an hour, a room full of other investment professionals sanctioned billions of pounds going into a scheme that shortly evaporated.

If the philanthropy and impact investing world is to live up to the promise of changing the world for the better, then the toxic behaviours the investment world has become used to must die. This will never come about solely as a result of the Financial Conduct Authority’s excellent attempt to force regulated entities to train their staff in how to behave better — though they are right to try. We need to rise above the desire to show off about how clever we are, and try to dazzle investors with our magic black box of wizardry that only we truly understand. “Trust me, I’m a banker” is as flawed as politicians asking for the public’s trust.

Last week, I read about a large US investment house deciding to start investing for impact. There is much to be celebrated when organisations that have access to billions of dollars want to turn their energy towards having a positive social impact. But I confess I sighed, as the article went on to highlight their declared intent to quickly become a ‘market leader’. I wanted to scream at them. Of course, it is fine to have an ambition to be a market leader. But the arrogance that their first objective is simply a desire to win, and thus miss the chance to focus on something beyond themselves, is truly disheartening. And I would argue there is no place for it in the world of impact investing.


Resonance is a small firm — 18 years young — with enormous ambition. But our ambition is about giving homes to the 80,000 families stuck in temporary accommodation; or the 2,000 people with learning disability who have been locked away for years in institutions because of their ‘challenging behaviour’. There are cheaper, better alternatives that can be unlocked with investment.

As an engineer I’ve always been interested in how things work, or more specifically, in the things that don’t yet work well. Resonance is now looking after over £200m of other people’s money, and to tackle some of the issues we see in front of us we need to add a zero to that in the next few years. All the funds that we manage find their way to becoming useful capital in the hands of a social entrepreneur. But to access this kind of scale, we need to plug into the mainstream markets. Resonance has a number of direct relationships with owners of capital, but increasingly the regulatory mechanisms prevent our unlisted, illiquid funds from being marketed to them. The wealth managers who are seeing their clients wanting more than just a financial return are increasingly important, but remember, people like my Dad are no longer viable clients for them.


What we need is a fund of funds listed on a public market that allows all forms of capital to invest in a wide range of impact funds. This would bridge the gap between Resonance’s niche funds, focused on specific impacts using a particular approach, and the investors who want their capital to be working for impact but haven’t the time or skill to work out which ones to back.

So when Friends Provident Foundation (all that remains of the fund my Dad and I backed in the 80s) first invested in one of Resonance’s funds, it felt a little like I was looking after my Dad’s own money and I felt a huge sense of responsibility not to let them down. And then they joined the brave pioneers that founded Snowball Impact Management — an investment vehicle with a global portfolio of investments across all asset classes with one thing in common: all the funds (including some of Resonance’s) are measured on both their financial performance and the impact that the funds in their care are enabling to happen.

Maybe it’s providence, maybe we’ve actually become friends.


Daniel is the CEO of Resonance and leads the growing team supporting social enterprises and charities prepare for investment in a variety of transactions, including real estate acquisition and development, community share issues and direct venture capital investments. He has seen the company flourish as it has created demand-led, impact investment funds, now managing over £200m of investments. Daniel founded Resonance in 2002, having spent several years in manufacturing as an engineer and leading a political lobbying campaign on the UK poverty trap. Outside work, Daniel is a non-exec of a small number of high impact social enterprises and a trustee for a leading impact investor foundation.

Daniel Brewer, CEO & Founder of Resonance.
Daniel Brewer, CEO & Founder of Resonance.