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Big Society Capital launches initiatives to further develop the growing UK social investment market
At an event to launch Big Society Capital’s (BSC) first Annual Report, Nick O’Donohoe, CEO, outlined a number of proactive initiatives for 2013 to drive the development of the social investment market in the UK.
- BSC is working with large grant makers and other social investors to create new forms of financing, available across the different development phases of community assets
- BSC is working with social investment finance intermediaries (SIFIs) to address the demand from social sector organisations for unsecured lending facilities – currently recognised as a significant gap in the market
- BSC is confident that new social investment products will emerge in 2013 to make social investment accessible to retail investors, including funds that invest in charity bonds. BSC is also working closely with HM Treasury to develop the possible form of tax incentives for retail social investment (as announced by the Chancellor in the Budget)
- BSC is partnering with the Northern Rock Foundation to capitalise SIFIs in the North East of England. This is the first of what we hope will be a number of such regional funds in particular geographies across the UK
- BSC believes there will be demand for a second outcomes finance fund alongside the Bridges Social Impact Bond Fund and will be issuing a call for a fund manager. BSC will provide a cornerstone investment to this fund.
The Big Society Capital Annual Report covers the period from April until December 2012, and details how BSC has performed both as an investor in social investment finance intermediaries (SIFIs) and as a champion for the social investment market in the UK.
Highlights for its first nine months of operation include:
- £56 million of investment commitments to 20 SIFIs.
- £39 million of capital from BSC and its co-investors has been signed and delivered to 15 SIFIs.
- 13 new SIFIs have been created and 23 frontline organisations have benefited from financing made available by them as a result.
Details of all the investment commitments that were made and case studies are included in the annual report.
Nick O’Donohoe, CEO of Big Society Capital, said:
“We are seeing a rapid increase in interest in the social investment market. There are a number of drivers of demand for investment including the need to ensure that social organisations have access to the funding they need to compete effectively with private sector providers for outsourced services; by the Localism Act which makes it easier for communities to purchase assets and provide local services; and by the mutualisation agenda particularly for health and social care service providers. This will be supported by the Social Value Act which requires government bodies and local authorities to consider social value when awarding public contracts.”
Sir Ronald Cohen, Chairman of Big Society Capital, said:
“I believe we are on the threshold of an era of social entrepreneurship, in which the motivation of talented individuals to help others as well as themselves is increasingly widespread. Social Impact Investment provides the funding to achieve this. Big Society Capital has ambitious aspirations to transform the social impact investment market in the UK. We have a passion for this enterprise and we are delighted with the significant progress made during our first year of operation.”
Big Society Capital Annual Report: