Richmond Capital Solutions (“RCS”) is a developer of products and services catering to end clients servicing sub-sovereign sector borrowers, including Local Authorities, Universities and NHS Trusts. RCS works as the nexus between such parties - that are seeking long term funding for their social infrastructure needs - and institutional counterparty providers of funds seeking long-term, inflation-correlated income streams and capital preservation, whilst simultaneously facilitating their borrowers’ high impact social infrastructure investments.

RCS has developed the SIBIL® (Social Impact Bond Index Linked) which involves the application of a financial instrument with specific characteristics to a property development delivery solution. Working together with FSA-regulated specialist advisory firm Stedman Denny, real estate consultants Colliers International and pan-European developers Stonehill to whom RCS has licensed the use of its SIBIL® trademark, the team is actively addressing the acute need for income-producing, high impact social real estate, including housing as well as educational facilities and other community infrastructure, required for delivery by Local Authorities, Universities and NHS Trusts.

The funding for such infrastructure investments is achieved by – Stedman Denny on behalf of the team - arranging long-term capital via SIBIL® financing from ‘private placement’ investments, for the most part from some of the UK’s best-known Life Companies. Such entities seek reliable, long-term, index-linked income streams to offset their forward liabilities, and strong covenants, particularly those of Local Authorities, are especially attractive.

To this end Stonehill’s principal activity in the UK is the promotion of the SIBIL® financing concept, which it is rolling out on a nationwide basis with the active collaboration of Colliers International to the latter’s network of Local Authority clients. The projects supported by the SIBIL® primarily involve the delivery of rented residential accommodation let at affordable rents, with Stonehill guaranteeing project delivery within a pre-agreed budget.

In addition to its SIBIL® offering RCS has other products in development that it has commissioned, including pricing and credit ratings models in support of its core objective to match seekers of secure long-term funding with providers of the same.

Electrum Capital Limited (“Electrum”), a UK-based, FCA-regulated investment manager and investment advisor, is RCS’s shareholder. Electrum establishes and manages investment funds and has passporting facilities under the AIFM Directive, enabling it to offer investment advisory services and the management of Alternative Investment Funds in certain European Union jurisdictions.

The team at Electrum, principally through its affiliate Guardian Managers Sarl, has a track record of delivering successful investment over many years across Real estate, Fixed Income and Private Equity. It is this specialist expertise that it is now seeking to deploy on behalf of RCS in relation to property funds in process of creation.

Nigel Heilpern is a Principal of Electrum and was also a partner at Avonhurst. For the last 30 years, he has specialised in real estate law and financing, representing developers, banks and other institutions in a range of real estate transactions, and advising real estate opportunity funds and major investment banks on their European real estate investment programmes. With experience in complex real estate financing deals, he has advised on the equity, banking and restructuring elements of these transactions. Nigel has been a partner in international law firms since 1994, including Nabarro, Fried Frank and King & Spalding.

The Social Impact Bond Index Linked (“SIBIL®”) is a long-dated, index linked debt instrument. The SIBIL® takes advantage of interest rates that have reached their lowest level ever and are currently close to 0% in the UK. Access to such ultra-cheap debt provides Local Authorities - and Universities and public sector bodies such as NHS Trusts - with the opportunity to take advantage of their sub-sovereign credit status by issuing SIBILs® to raise finance to develop ESG-sustainable projects such as affordable rented housing and affordable student and nursing accommodation on lower cost terms than typically provided by the private sector which finds projects of this type difficult to justify commercially.

The SIBIL® concept – which has been pre-qualified with some of the UK’s leading institutional investors - bridges the gap and delivers socially beneficial projects that are both affordable and ESG-compliant. In addition, the strength of the financial covenant of the issuers of the bonds and their commitment to pay agreed annual amounts on an indexed basis for a term of years, allows the transfer of ownership of the assets to issuers on day one, without charge or encumbrance.

To maximise pricing options for the SIBIL® RCS has commissioned the building of a model based on Gilt and Index linked Gilt prices. A further model for the CPI to RPI “spread” will also be built to ensure all potential structures can be priced. Market levels for future inflation can then be extracted from this model to allow for accurate option pricing for the embedded “caps” and “floors” at each coupon payment date. As interest rates and inflation rates are correlated, a hybrid model will then be developed.

RCS has also commissioned a real-time database using data from national statistics and financial data from the UK’s Local Authorities (“UKLAs”), from which to derive a stand-alone rating - aligned to current rating industry methodology - for each UKLA in England and in due course throughout the UK. The model will allow comparative analysis on a multi-year basis and will provide visualisation / dashboards of key statistical data ranking each Local Authority.