Warwickshire County Council has invested £30m in the Threadneedle UK Social Bond fund, with a further £10m committed over the next few months.
Head of finance at Warwickshire County Council, John Betts, explained the fund offered an opportunity to generate solid returns, while allowing the Warwickshire fund to put its money to work for the benefit of society.
Betts added: “Our investment supports organisations that underpin sustainable economic development and job creation up and down the country. The daily pricing and liquidity gives us the ability to shift back into cash at short notice if necessary, which was an important factor for us – typically social investments require investors to lock their money away for a number of years.”
Just over 10% of the Threadneedle fund’s £49.2m portfolio is invested in the Midlands. Holdings include bonds from Derbyshire Healthcare, East Midlands Housing Association, Walsall Housing Group, Coventry Building Society, Birmingham Airports and WM Housing Group.
Threadneedle local authority client director Moira Gorman said: “We are thrilled that Warwickshire County Council has decided to allocate a substantial amount to our fund. It has generated returns similar to those of a plain vanilla corporate bond fund, while also contributing to economic and social development. For instance, approx. £11.3m has been allocated to the construction or refurbishment of social housing. Warwickshire’s investment is a good example of how investors can make use of capital markets to promote positive social outcomes, and a clear realisation of our goal to bring social investment into the mainstream.”
Since its launch in January 2014, the fund has returned 6.89% net of fees.
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