Big Society Capital is the world's first social investment bank established to directly fund social enterprises that are tackling major social issues, with the intention of creating a sustainable social investment market.
Yesterday they announced details of its initial investment commitments totalling £37 million. According to present reports by the Boston Consulting Group, the demand for social investment is expected to keep growing as the big society and localism concept takes off, and the expected figure is £1 billion of investments by 2016, and the demand for capital in the social sector could grow at 38% a year.
Big Society Capital's CEO, Nick O'Donohoe said:
Big Society Capital has made significant progress since our launch and we are on target to make investment commitments of around £50 million by the end of 2012. The quality of commitments made so far is encouraging and they reflect diversity of investment type and by geographic region in the UK. The Guildhall event is an opportunity for City professionals to explore how they can further engage with this initiative.
Below are some of the key investments announced.
Making loans to provide affordable rental properties in local communities
Big Society Capital has made a £2,500,000 secured loan to Community Land & Finance CIC (CLFCIC), a subsidiary of impact investment firm
Assisting social impact funds in productively investing their capital
Big Society Capital has made a £1,000,000 staged investment to support ClearlySo, a social finance intermediary with over 12 years' sector experience. ClearlySo is growing its capital raising business to help meet the expected surge in demand for investment from social entrepreneurs and to assist new and existing social impact funds in productively inves
Providing small, low interest loans to communities to meet the costs of installing renewable energy equipment
Big Society Capital has invested £1,000,000 to PURE to provide small, low interest loans to communities to meet the costs of installing renewable energy equipment, and is keen to support all technologies eligible for the Feed-In-Tariff or Renewable Heat Incentive. PURE will normally lend up to 50% of project costs to a maximum of £50,000.
Building the charity bond market
Big Society Capital has made a £875,000 secured loan to The Social Investment Market CIC Ltd ('SIMCIC' is the FSA regulated subsidiary of Investing for Good CIC Ltd) to enable SIMCIC to underwrite the issuance of a fixed income bond in order to build the market for further issuance by charities and social enterprises.
Community Generation Fund – part of FSE Group
Generating renewable energy in deprived areas
Big Society Capital has committed to invest £750,000 (alongside £500,000 from the Esmée Fairbairn Foundation) in the Community Generation Fund, managed by the FSE Group.
To see more details visit http://www.bigsocietycapital.com/how-we-invest or view Big Society Capital's Press Release on their investments.