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Dan Gregory Chief Officers Feb 2011
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Dan Gregory Chief Officers Feb 2011

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    Dan Gregory Chief Officers Feb 2011 Dan Gregory Chief Officers Feb 2011 Presentation Transcript

    • Local Partnerships The DH Social Enterprise Investment Fund, case study and lessons learned
    • Background
      • Capital, finance, investment vs. revenue, funding, income
      • (debt, grants, equity) (grants, contracts, fees)
      • Investment need to respond to / be tailored appropriately to the potential for income generation. E.g. you only lend to someone if they can afford to repay. And you should only borrow to invest for the future.
      • So what is the potential for revenue generation? In other words, what is the ‘state of the market’…?
    • Case study: The market for community health services
      • Immature commissioning
      • Uncertain future commissioning landscape
      • Cuts
      • Provider side dominated by state providers but opening up
      • Payment by results?
      • Comparison with youth services?
    • The Social Enterprise Investment Fund
      • £100m fund
        • To support the delivery by social enterprises of innovative health and social care services and products;
        • To provide start-up funding and longer term investment to emerging and existing social enterprises in the health and social care sector with a view to securing their sustainability.
        • For the SEIF to become financially sustainable through returns on non-grant investments and through leverage of funds from external investors.
      • For emerging and existing social enterprises
    • SEIF investment policy – the theory
      • Viable but not bankable
      • Products
        • Business development grants
        • Loans
        • Grants
        • Convertible grants
        • Quasi-equity
        • Guarantees
        • Equity
      • Co-investment
    • SEIF – challenges in practice
      • Politics
      • EYF
      • Perverse incentives for fund manager and Department:
        • co-finance
        • fund sustainability
        • Innovation
        • products
      • Investment approach vs. programme model
    • A youth sector spin-out fund?
      • NESTA call for proposals
      • Proposal:
        • to use BSB capital to attract co-investment into a sustainable fund, which will provide financial support to youth services which wish to spin-out of the local public sector into viable social enterprises.
    • What is the opportunity?
      • To provide the financial means to catalyse, nurture and support the spin-out of youth services from the local public sector, into viable social enterprises.
      • To accord with an overall national and local policy direction , a move to a plurality of local services provision, moving services closer to the communities who rely on them.
      • To focus on youth services in particular, an area of national and local priority where there is evidenced demand for alternative means of delivery.
      • To leverage BSB capital by attracting co-investment into a fund which will provide the financial support for local youth services to spin-out into social enterprises.
      • To fill a gap in the market , fledgling spin-outs are typically un-bankable but spinning-out takes both human and financial resources.
    • Who will invest and how? Big Society Fund? Bank? (quasi-) equity Nesta f HSBC? CFS? Debt Commercial Lenders e Bridges? Baxi? (quasi-) equity Social VC d CAN? SFCT? Grant Social Investors c Local Authority? Grant Public sector b Staff and community? Equity Stakeholders a Example Investment Investor
    • Questions
      • Does this investment model respond to / is it tailored appropriately to the potential for income generation?
      • Could this offer an opportunity to create a social investment fund for the youth sector?
      • Market dynamics particular to the youth sector:
        • Already mixed market of provision?
        • Asset rich, cash poor?
        • Untapped potential for social enterprise models?