First Canada-wide lending fund for community bonds launches
Why It Matters
The new fund aims to make impact investing more accessible, helping non-profits that focus on initiatives like affordable housing and clean energy secure the funding they need to thrive.
A first-of-its-kind investment fund has launched in Canada to support the growing community bond market and the organizations that rely on funding.
Tapestry Community Capital announced its Weave Community Capital Fund LP, a national private credit fund focused on lending to community bond issuers, including charities, non-profits, and cooperatives, financing high-impact projects.
Weave is designed to bridge grassroots fundraising with institutional money, according to Ryan Collins-Swartz, the co-executive director of Tapestry.
“Our mission is to democratize access to capital and to enable everyone to invest in their community,” said Collins-Swartz.
The fund, which has a target size of $30 million, is expected to open its first round in July.
Community bonds are typically marketed to everyday people, known as retail investors, who want to use their savings to support local initiatives directly.
Weave hopes to bring in larger, trusted institutions who have the same vision and values as the community they want to support. The goal is to provide a simplified and diversified way to invest.
“For an investor, it makes it a lot easier. They don’t need to do due diligence on, let’s say, the 20 different community bonds that we have coming up in a year. They can just make one investment, and that can support a wide range of projects nationally,” said Collins-Swartz.
Weave is also working to create a more equitable investment landscape for non-profit projects, he said.
“(Community bonds) work really well when you’re supported by wealthy communities. But how does a community bond model work where there maybe is not as much local financial capital in that area?” he said. “This is a really nice way of attracting and bringing in outside investment in an ethical way to then support community wealth building locally.”
Realize Capital Partners is expected to be its first and lead investor.
Realize is one of three organizations chosen by the federal government to distribute funds from the $755 million Social Finance Fund.
“Investments in the Social Finance Fund are making a real difference by providing Canadians with equitable opportunities to launch and scale their mission-driven businesses, like Weave Community Capital Fund,” said Patty Hajdu, the federal minister for jobs and families..
In the past two years, the Social Finance Fund has supported more than 80 businesses, she said, totalling more than $250 million.
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