Portfolio management

At the heart of connecting capital to the organisations improving people’s lives are the fund managers, social banks and other intermediaries. We invest through these intermediaries and support them to raise more capital, deliver more investments and create more impact.

£104m Amount drawn down by fund managers deploying investments
£32m Increase in drawdown compared to 2019
£255m Drawdown with matched co-investment
£58m Increase in matched drawdown compared to 2019

The challenge

The social impact investment ecosystem is relatively new and still developing the structures, organisations and track record that attracts investors. Each market segment from outcomes contracts to property financing, and from venture investing to lending for smaller enterprises, requires different skills and channels to connect capital to organisations delivering impact.

Our approach

We work with impact fund managers and other intermediaries as they look to scale as well as more mainstream managers looking to move towards investing with more impact. We provide investment and monitor the investments ensuring they deliver their predicted financial and social impact returns. Alongside this investment we provide a range of support to help them become more sustainable in the long term.

Our investments in 2020

We start with the social issue, then aim to identify the sustainable enterprise models that can help address it. We then seek out, invest in and support fund managers who can channel investment to those enterprises.

We help these fund managers establish proposals that balance the needs of investors with those of social enterprises, charities and social purpose organisations. We also help them build a successful track record that can attract more capital over time.

During the year, £104 million was drawn down by intermediaries deploying investments compared to £72 million in 2019. With matched co-investment, the year’s drawdown amount was £255 million compared to £197 million in the previous year. The level of new investments and drawdowns in 2020 were at record levels for us. During a time when some other investors became more cautious, we aimed to provide additional investment at the time it was needed most.

Support in 2020

In response to the pandemic, portfolio management activities in 2020 pivoted to our Covid-19 priorities of sharing information, adapting existing funding where needed and supporting intermediaries in our portfolio.

Sharing information

Sharing information with our fund managers and partners was crucial, particularly as the crisis hit. We established early in the crisis regularly updated social investor and charity and social enterprise pages on our website, which include a charity and social enterprise guide to funding possibilities, hosted over 48,000 unique users in March-May 2020.

At the height of the lockdown (March-July), we published a weekly blog to give real time transparency into the crisis response programs we were designing with partners and sent out a regular letter with additional information to all intermediaries in our portfolio. We also took an active part in sector forums such as for loan managers, to share information on the developing need. We later published these insights in our “Mapping the Needs” publication to help guide other investors.

Adjusting existing funding

Working closely with our fund managers to adapt investments as needed, capital and interest holidays were granted to over 500 organisations in our portfolio. In addition, we amended the terms of many of our direct investments into intermediaries, and provided additional funding as needed to support organisations through the crisis.

Supporting fund managers

We adapted our manager support programme to focus on areas where it was must useful through the crisis.

Activities in 2020 included:

23 training sessions attended by over 330 people – including sessions focused on staff wellbeing and the changing working environment
Access to TogetherAll, an online service providing advice to millions with anxiety, depression and other common mental health issues, for all staff members of intermediary organisations in our portfolio
Assistance with recruiting nine non-executive director positions for seven of our intermediaries
A leadership programme for senior staff and executives
Dedicated, tailored investment and support for fund managers looking to scale, with Zamo Capital investing in two of our intermediaries – Social and Sustainable Capital and Ascension Ventures