We take an active role post-investment to build social and financial performance and share learnings.
Members of the investment team lead on management of portfolio investments. This is overseen by the Head of Portfolio Management.
How our investment criteria influence our activities
We work with intermediaries to measure and monitor the impact of their investments to help understand if they are achieving the intended social change.
At the point of each investment, we develop and agree a Social Impact Plan with the intermediary. This sets out their approach to screening and assessing social impact of investments as well the impact data that they will report. It incorporates certain key impact metrics that the intermediary will track against target to determine if the investment is achieving its impact goals. We aim to set a proportionate approach, so the level of detail will vary according to the type of investment and the circumstances of the intermediary.
In addition to tracking impact at a fund level, we are starting to track a set of consistent data across charities and social enterprises that receive investment from our intermediaries. This set includes:
- Target beneficiary group
- Target outcomes
- At least one indicator per outcome, tracked over time against a baseline value
- Target value per indicator and performance against target (if applicable)
Indicators used will be mapped back to our Outcomes Matrix so we can build a picture about the impact being generated by charities and social enterprises across our portfolio.
Building the market
A critical part of our role is building strong and sustainable social investment intermediaries. We work closely with our investees to address gaps in capability or areas of underperformance. Together with social investment fund managers and advisors/arrangers we have been exploring the essential components that make up an intermediary and what they look like in practice.
We provide support to our investees through training programmes, assistance with non-executive recruitment, business development and impact reporting support. An example of this is the six-monthly induction program we run for new joiners at our intermediaries, Big Society Capital and other partners - the course material can be found here.
By investing our capital and support, we aim to build a thriving ecosystem which has strong intermediaries and more available finance from diverse sources. We will judge our ultimate success by the growth and social impact of the broader environment we help create, not just the direct impact of our investment capital.
Given the source of our capital and broader market building objectives, transparency was one of our key founding principles. We are therefore continually focused on finding ways to share information and lessons from our portfolio. There is more detail in our transparency project. As part of our focus on improving best practise and the user experience of social investment, we will also organise surveys of actual and potential investors and investees involved with our intermediaries.
We focus on sustainable intermediaries and solutions that will achieve positive investment returns as we believe those will be able to attract the most co-investors and ultimately achieve the greatest systemic change. We aim to provide additional financial planning and strategic support for intermediaries as they grow sustainable operating models.
In many of our investments we represent a large proportion of total capital, and in those cases will request a role in the governance of the investment. This could involve a board seat for direct investments or Investment Committee observer rights and Limited Partner Advisory Committee representation for funds. We also see these roles as important in our broader objectives to share learnings and best practise. We may nominate an external appointee to these roles.