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Investor Perspectives on Social Enterprise Financing

13 July 2011

With demand on BIG’s funding being greater than ever, now is an important time to look for new ways to bring improvements to communities, especially ways of attracting investment from outside the public sector. The social investment market is already growing and there is potential for it to become an important source of funding for the sector.

BIG has already made initial steps into the market and the Peterborough Social Impact Bond (SIB) is a prime example. The SIB has brought together seventeen social investors in a scheme to reduce repeat offending by those completing short sentences in Peterborough Prison. It is regarded as a landmark social investment initiative which has pioneered the approach to payment by results across the UK. Other investments considered by BIG include funding for social enterprises and the prospect of giving loans rather than just grants.

Our interest in financing models led us to explore opportunities for further study into the market and we’ve joined forces with City of London Corporation and City Bridge Trust to commission some research which looks into the perspectives of different types of institutional investors towards investment in social enterprises.

Authored by ClearlySo, the research involved 55 interviews with institutional investors including pension fund managers, banks, private equity firms, independent financial advisors and charitable foundations and was supported by a high level group of social finance experts from institutions such as Deutsche Bank, Coutts, UKSIF and Venturesome.

Today sees the launch of the findings – ‘Investor Perspectives on Social Enterprise Financing’ – which were presented at an event at Guildhall in front of an audience of industry stakeholders, institutional investors, third sector organisations and social finance intermediaries.

The findings provide an insight into both opportunities and obstacles concerning the growth of the social investment market and highlights the key role intermediaries have to play in helping investors and investees meet common aims.

Given the intricate nature of the social investment market, it is perhaps unsurprising that the report does not offer a ‘one size fits all’ solution to the challenges of the sector. It does however, provide invaluable insight into the requirements of investors and paints a very positive picture of the desire of investors to engage with social enterprises to drive innovation and achieve social impact.

For more details and to download a copy of ‘Investor Perspectives on Social Enterprise Financing’ , click here.

 

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