Big Society Capital presentation to LESPN 19 March 2013


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  • As mentionedearlier, as an investor, we invest only through intermediariesIntermediary works between investors (like BSC) and front-line (like charities) Intermediaries can come in various shapes and sizes
  • Big Society Capital presentation to LESPN 19 March 2013

    1. 1. Social investment andemployment/skills deliveryDaria Kuznetsova–March 19, 2013 19 March 2013
    2. 2. Social investment is for social and financial return. Social investment is the provision of finance to generate social and financial returnsCharities and social enterprises are particularly suited to social investment. They can deliverstrong social returns but struggle to access capital via mainstream marketsRange of products – social investment provides a range of products such as securedloans, unsecured loans and equitySocial investment is not a grant – there is an expectation of repayment of the finance, plus areturnGrowing demand- £165m of done deals in the UK in 2011 with potential demand reaching £1bnby 20161 First Billion (2012) Boston Consulting Group 2
    3. 3. We’ve been long in the making! 2010 Final report of the Social Investment Task Force 2012 Launch of Big 2007 Society Commission Capital on Unclaimed Assets 2011 2000 The Big Society Social 2008 Investment Investment Dormant Fund under Big Task Force Accounts Act Lottery launched 2006 Government sets up the Office of the Third Sector 3
    4. 4. Big Society Capital – building a sustainable social investmentmarket in the UK HSBC Dormant Barclays Accounts Lloyds TSB RBS £600m capital Big Society Capital Investors seeking Social Social organisations investments that create a Investment requiring capital to allow positive social impact Finance the organisation to grow beyond financial return Intermediaries to scale Operating Principles Independent Transparent Wholesale Self-sufficient
    5. 5. What is an Intermediary? Investor Investor Investor InvestorWho is an intermediary? What does an intermediary do?• Investment Readiness Providers • Select investments• Social Funds Intermediary • Monitor social and financial performance• Social Lenders/Banks • Diversify risk• Social Impact Partnerships • Raise capital for future investments• Market Infrastructure Frontline Frontline Frontline Frontline
    6. 6. Already the market is changing – in 2011 there were only a fewplaces to go if a social organisation needed capital Investment Readiness Social Funds Social Enterprise funds Specialised funds Social Lenders Social Impact Bond Partnerships
    7. 7. At the start of 2013 there were many more Social Investment Readiness Incubator Fund Social Funds Social Enterprise funds Specialised funds Results Fund Social Investment Social Lenders Market CIC Social Impact Bond Partnerships
    8. 8. We have made £56m of commitments of 4 broad types General funds – Specialised funds – Social Impact Bonds – Operating increase supply of invest with themes provide upfront capital for intermediaries– capital available such as sectors or social ventures delivering provide support to to social ventures regions services under PbR social sector contracts organisations NESTA Impact Franchisingworks Capitalise SIB Social Stock ExchangeE.g. Investment Fund License Fund Invests in social Provides finance to Supports a programme to Connects socially enterprises that purchase franchise helps address the root causes motivated investors with use technology and contracts and enable of low attainment in schools in social purposeApproach innovation to solve unemployed and the Cardiff and Newport businesses that need social issues financially excluded area, such as literacy problems capital. people in Manchester and low self-esteem/belief. to set up their own franchise businesses. Nesta The Shaftesbury 3SC Social Stock ExchangeSIFI Partnership
    9. 9. We see several areas of opportunity for social investment inemployment and skills delivery • Academic success: school based interventions to improve attainment • Vocational preparation/employability: preparing individuals for employment, developing skills that contribute to economic well- being • Improved skills for jobseekers: supporting jobseekers to enter employment through development of work specific skills, attainment of relevant work experience and improving motivations
    10. 10. So – when is social investment appropriate and how do you getit? There are at least 3 steps… Define a Develop a business The investment process itself revenue model and impact plan • Investment readiness • Business plan with support • Trading business financial model • Approach social investors • Public sector contracts • Evidencing social value • Investment due diligence • Buying an asset
    11. 11. Are you seeking social investment? Social Sector Organisation Social Finance Intermediary Online Expression Directory of Intermediaries Ideas of Interest www.bigsociety www.bigsocietycapital .com