Fund Managers, Social Banks and other Intermediaries
At the heart of connecting capital to the organisations improving people’s lives are the fund managers, social banks and other intermediaries, like crowdfunding platforms. We invest through these intermediaries and support them to raise more capital, deliver more investments, and create more impact.
- 13 Number of fund managers with more than £50 million AUM in 2020 vs 1 in 2011 – All data from Big Society Capital
- £5.1bn Size of the social impact investment market in 2019 vs £830 million in 2011
- 44 Number of cornerstone investments we have made
The challenge
The social impact investment ecosystem is relatively new and still developing the structures, organisations and track record that attract 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 at every stage of their development – those that are starting, those that are established and aiming to scale and also more mainstream managers looking to move towards investing with more impact. We approach this in two ways:
Investment
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, and help them build a track record of success that can attract more capital over time.
Support
To help strengthen the social impact investment community, we’ve developed a sector-wide support programme for impact fund managers which includes:
- training for staff
- tailored fundraising support
- a resource bank of pro-bono expertise
- an organisational self-assessment system (the Building Blocks programme)
- assistance with non-executive recruitment
- a leadership programme for senior staff and executives
- dedicated support for fund managers to scale
- 330 Number of people from intermediaries that have taken part in our training sessions in 2020 – All data from Big Society Capital
- 23 Number of training sessions we've run for intermediaries in 2020
- 11 Number of organisations that have gone through Building Blocks programme
Impact and learning
Big Society Capital measures its impact in this area in part by the growth of the social impact investment market and in part by how effective it is at unlocking impact through investment.
The total size of the social impact investment market has increased six-fold from £830 million in 2011 to £5.1 billion in 2019. At the same time, the market has diversified considerably, with alternatives to traditional bank lending growing twenty-fold from £169 million in 2011 to £3.4 billion in 2019. There has been significant growth in other areas since 2012:
- There are now 13 fund managers with assets greater than £50 million investing in social impact whereas we launched in 2012, there was only one.
- The social property market is now worth more than £2 billion, while there were no such funds when we launched.
- We have provided the initial cornerstone investment into 44 new funds, which in turn has given other investors the confidence to invest alongside us.
- Around 75% of our investments have been in first-time funds, teams or products.
- We have worked with fund managers to develop four specialist outcomes funds, where there were none in 2012.
- The reach of small loans has developed through the Growth Fund, working with 16 fund managers and now reaching more than 400 social enterprises and charities.
- Our equity investments in Unity Trust Bank and Charity Bank have helped to scale social banks, growing Charity Bank’s lending from £40 million to over £250 million.
- We’ve worked with mainstream fund managers such as CBRE to make sure impact is at the heart of their funds.
We have learnt through our investments the crucial factors that are needed for fund managers to deliver financial and social outcomes, and have these captured these in our Building Blocks programme.
