When Big Society capital was created in 2012 it set out to be a major player in a growing area: that of social impact investor.
Now, having morphed into Better Society Capital (BSC), that can said to have been a success, with more than 3,750 charities and social enterprises across the UK have been supported through £1bn of investment from BSC and £2.9bn in co-investment from new investors.
This has made nearly £4bn available to organisations across the UK tackling complex social issues including housing, employment, education, health, and financial inclusion.
Looking at BSC’s 13-year journey, Anna Shiel, chief investment officer (pictured), highlights three key areas that stand out – each pointing to the evolving nature of the social investment sector in the UK.
The first is the power of recycling capital.
Going back to 2012, after receiving £400m from dormant bank accounts and £200m from Barclays, HSBC, Lloyds Banking Group and NatWest Group First, BSC committed a first investment of £2.7m into The Foundry, an affordable office space for social enterprises and charities in Vauxhall.
The £400m initial dormant assets have now been multiplied 10 times into more than 140 fund commitments by BSC and other investors, reflecting the power of recycling capital.
Second is tackling critical social issues. This capital, Shiel said, is now reaching more than 3,750 impact-led organisations tackling crucial social issues including housing, employment, education, health, and financial inclusion.
The impact has been real: more than seven million people supported through impact venture investments in financial inclusion and health, more than 7,000 homes delivered – housing around 15,000 people – with more than 60% of BSC’s social lending investments directed to the UK’s most deprived areas.
Third, is what Shiel identifies as the vital role of partners. “This change is only possible through the work of vital partners, including the social enterprises and charities delivering front-line impact across the country and the investors seeking to invest for impact,” Shiel said.
In particular, impact driven fund managers have played an essential role in seeking out and creating investment solutions that meet the needs of enterprises and investors.
“By attracting diverse sources of private capital to invest alongside dormant assets, BSC has shown how £600m in initial capital can catalyse a much larger movement capable of tackling some of the UK’s most pressing social challenges,” Shiel said. “Alongside a diverse range of co-investors, the social impact investment market is now a multi-faceted ecosystem for investment, having grown 12-fold to more than £10 billion in size today.”
With many social issues deeply entrenched throughout the UK, the amount of capital needed to deliver social change is still substantial.
Shiel said the next stage of delivering BSC’s mission be focused on partnering with government across several policy areas including combatting homelessness, reforming children’s social care and the just transition.
“This is an exciting time for the sector – we are really proud to have helped demonstrate the value of social impact investing as an innovative way to using public and private funds for purpose,” Shiel said.
“What began as a relatively small pot of money has grown significantly with the help of incredible co-investors and delivery partners, giving us tremendous hope for the sector’s future,” she added.
“We see exciting opportunities for renewed engagement in the social impact investment market to attract new investors seeking to drive positive social change with their capital.”
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