Built To Last

Combining the security of bricks and mortar with effective investment bonds can be a prudent decision. James Matthews spoke to Executive Group Managing Director and Funding Director at Acorn, to discuss Bonds and plans for expansion

Where did the idea for the Acorn Bond originate?

When seeking to expand their business, traditionally a company of Acorn’s size, experience and balance sheet have looked for either a listing on a public exchange or some form of private equity investment prior to a Listing.  Acorn has an enviable portfolio of senior and mezzanine funders. However, the majority of funding is relatively short term. To assist with our expansion plans, we needed a longer term corporate funding facility.

After investigating various sources, we realised there’s a gap in the market for the funding of medium-sized housebuilders. There are plenty of investors looking for start-ups in emerging sectors or those seeking student accommodation or private rental sector blocks but not housebuilders providing homes for the general population.

During this process we observed the growth of the Crowdfunding business and the Bond models for property companies. As we analysed this, we became more convinced that this is the future of funding for small to medium-sized housebuilders.

Why do you believe bonds are the most effective way to raise capital for property development?

Most listing and private equity firms are looking for short term returns and results.  Property development can often have a longer time-line, before they yield any capital and most of the private equity funders wanted to take control of Acorn’s activities, whereas Acorn thrives on being flexible.

Why is Acorn so well-positioned to support regional housing demand?

The company brings its creative approach across different sites and regions directly or through joint ventures.  One of Acorns greatest strengths is its flexibility and this has led them to have such a strong presence throughout a region as varied as the South West.

What is Acorn’s current position in the market?

After years of due diligence we issued our first £10,000,000 Bond aimed at developing land that we already own/control.

Received well by the industry, Acorn has been recognised as one of the strongest companies who has issued Bonds of this nature.