Rathbones Supports the growth of the Charity Bond Market | Big Society Capital

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Rathbones Supports the growth of the Charity Bond Market

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Rathbone Investment Management (‘Rathbones’), a leading provider of discretionary investment services to individuals, charities and trustees, confirms its appointment as manager of the Charity Bond Support Fund (‘The Fund’). The Fund is a £10m investment commitment from Big Society Capital designed to help Charity Bond issuers to raise capital by encouraging both issuers and investors into the Charity Bond market.

The Fund is designed to increase access to debt financing for charities, adding a scalable source of capital to complement existing sources of finance, including grant capital, voluntary donations, bank lending and retained earnings. Increasing the number of financing options for charities and social enterprises will better enable them to cost effectively meet their financing needs and investment in their long term growth. If used appropriately, this will help enable these organisations to increase the social impact of their work.

The Charity Bond Support Fund is managed by Rathbones and will purchase up to one third of eligible Charity Bonds which meet the fund’s requirements. The Fund will act as a backstop to appropriately priced primary market issuance and build a portfolio of Charity Bonds.

Big Society Capital was advised by Freshfields.

Bryn Jones, Head of Fixed Income at Rathbones, said: “We believe that this is fundamentally important in creating a functional market for Charity Bonds. Rathbones was the first institutional investor to invest into UK Charity Bonds having supported the Scope issue in 2012, and we have since invested in a number of the issues that have come to market from Social Sector Organisations.”

Nick O’Donohoe, chief executive of Big Society Capital, said: “In recent months we have seen a transformation in the Charity Bond market, with increased interest from both charities and investors, as well as important infrastructure developments. Charity Bonds have the potential to open up the social investment market, and we hope that this fund will provide the support needed to enable more charities to seek investment in this way.”

Peter Allen, partner at Freshfields, said: “Developing the charity bond market is a great step forward in helping charities access new sources of funding and we are proud to have advised Big Society Capital on its Charity Bond Support Fund.”

Last updated | 
25 September 2014