Investment processes (for Fund Managers only) | Big Society Capital

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Investment processes (for Fund Managers only)

From interviews with social investment fund managers and research into best practice, here are the building blocks for purposefully designed, proportionate investment tools and processes.

Pipeline and reach

Identifying features

  • Staff experience of investment and working with charities and social enterprises
  • The understanding of relevant products and interventions for frontline organisations

Identifying procedures

  • Quantitative and qualitative feedback mechanisms allowing adaptation of product offering
  • Strategy for pipeline development

Portfolio construction

Identifying features

  • Active prioritisation of investment prospects
  • Portfolio level thinking and decision making

Identifying procedures

  • Structured process to consider strategic and portfolio fit of investments before due diligence

Assessment and due diligence

Identifying features

  • The diversity, balance, level of seniority and chemistry of the investment committee
  • Staff and IC members with sector specific knowledge
  • The investment committee’s understanding of fund’s mandate
  • Quality of investment analysis and judgment

Identifying procedures

  • Proportionate investment process
  • Mechanism to signpost unsuccessful applicants to other funding avenues and maintain relationships
  • Feedback procedures with frontline organisations
  • Investment policy alignment with organisation’s strategy

Monitoring and portfolio management

Identifying features

  • Builds ongoing collaborative relationships with investees

Identifying procedures

  • Post investment support including regular reporting framework
  • Feedback/complaints system
  • Exit strategy
  • Relationship managers for each investment

To see what that looks like in practice, download this guide