Growth capital for social enterprises.
Social enterprises are developing innovative, business-like solutions to tackling social problems, yet successful and investable social enterprises frequently face difficulties in accessing mainstream funding to finance growth. Social Enterprise Investment Fund II will primarily focus on providing expansion finance for growth stage social enterprises, however it will also invest up to 30% of commitments into early stage social enterprises.
The fund is seeking to create social impact by increasing access to finance for a broad range of charities and social enterprises across the UK.
Social Enterprise Investment Fund II aims to make approximately 40-50 investments and loans of between £250k - £3 million into high potential social enterprises, charities and profit-with-purpose businesses. The average size of investment is expected to be approximately £650k, with the projected portfolio split at: 60% debt, 15% performance-based debt, 15% social impact bonds and 10% equity.
The target net IRR for the fund will be 4 to 5% per annum with capital and net income distributed annually.
Big Issue Invest Social Enterprise Investment Fund II offers social enterprises, charities and profit-with-purpose businesses, loans and investments for early stage development needs to growth and expansion capital. Big Issue Invest predominantly invests into asset locked organisations, however in exceptional circumstances Big Issue Invest may invest in for-profit social sector organisations. The organisations span activities across a range of social outcome areas, including: employment, mental health, health and social care, financial inclusion, community development, and community-led development.
The Social Enterprise Investment Fund II fund is a follow on fund from Social Enterprise Investment Fund I, a £9.2 million fund which is was fully committed as of 2015. Big Issue Invest have created this second fund to build on their track record of supporting high performing social sector organisations delivering social change.
- Total fund size:
- Big Society Capital's investment: £15 million
- Co-investors: HSBC, Golden Bottle Trust; Nick Marple; Bank Workers Charity; Joseph Rowntree Foundation; and Charities Trust