Private Capital Seeks and Finds Its Social Impact
As market makers involved in social finance, we know that nothing stays the same and are continuously on the look out for opportunities to report on the changing political and economic landscape.
This blog series keeps SocialFinance.ca readers informed about rising tides and new announcements on the world’s scene. The first blog focused on the political landscape in the UK. But wait, there is so much more going on.
This November 30th and December 1st, London is hosting the Impact Investing Forum. The Forum points to the recent Money for Good report, May 2010, prepared by Hope Consulting that outlined a $120 billion market opportunity for Impact Investing, with almost 90% of individuals surveyed expressing openness to impact investing. The forum will speak to investors who are seeking investments that generate a social and environmental value as well as a financial return.
Such market opportunities continue to catch the attention of private capital. For instance Social Enterprise in the UK, reported Coutts Bank’s recent launch of their social enterprise advisory services. A quote from Coutts CEO, Michael Morley said, “In the 1980s, the entrepreneurs’ motto was ‘who dares, wins’ but that this has now shifted to ‘who cares, wins’”.
Morley was inspired by the work of Big Issue Invest, a specialized provider of finance to social purpose businesses and trading arms of charities that are developing business solutions that create social and environmental transformation.
Another important development shows that there’s a great need to support social entrepreneurs to build their businesses to become investment ready. Recently, the Triodos’ Social Enterprise Fund (£3m) set up to invest equity venture capital in social enterprises has closed after only one £320,000 deal. Social Enterprise reports that Charles Middelton, UK managing director said, the bank had not found the appetite for equity that it expected, or enough social enterprises in a strong enough position to take on equity [investments].”
Bridges Social Enterprise Fund (£9m) has only made two investments since it’s launch in 2008 (HCT Group for a £3m social loan for expansion and Call Britannia for early stage investment of £1m). Bridges also provides advisory services through Monitor Group and UnLtd.
Some key developments in the world of Venture Philanthropy in the UK and Latin America: Alliance Magazine spoke with Nat Sloane, from Impetus Trust, about its partnership with four other foundations that invested £2 million with a group of six innovative organizations on an initiative that aims to reduce re-offending rates in the UK over a 10 year period.
Finally, the IGNIA Fund, Latin America’s first and largest impact investing fund, completed closing a fund worth US$102 million to serve businesses at the base of the socio-economic pyramid. The statement included a quote from Álvaro Rodríguez Arregui, Co?founder and Managing Partner of IGNIA: “We are delighted to have J.P. Morgan join our Fund, and are grateful for their confidence in our ability to create positive social and economic value through our investments. By supporting IGNIA, our investors are helping to create a new industry – that of impact investing,” JP Morgan completed the round with a US$5 million commitment and Corporación Mexicana de Inversiones de Capital (Fondo de Fondos) committed additional capital, bringing its total commitment to US$7.5 million.
And that’s not all, stay tuned for updates from Australia. If you know of a key international trend or development please contact us.
Photo credit: http://www.flickr.com/photos/davidprior/125263215/
