A big day with news from the G8 task force, more on the Bridges Ventures SIB fund and The Economist profiling G8 task force Chairman Ronald Cohen.
Social Impact Bond Fund Should Give Returns Of 5% A Year, Says Antony Ross Of Bridges Ventures
Christopher Goodfellow – Third Sector
The Bridges Social Impact Bond Fund has closed to new investment after raising £25m since its launch last year; Ross, a partner, says the growth rate is encouraging
A fund that will invest in social impact bonds, set up by the fund manager Bridges Ventures, has closed to new investment after raising £25m.
The Bridges Social Impact Bond Fund was launched last year and raised an initial £14m to invest in social impact bonds that fund work in such areas as early intervention in education, employment, housing and care for vulnerable young people.
Bridges Ventures said the fund, which closed to investors at the end of July, had since raised an additional £11m, including investments from the European Investment Fund, the Great Manchester Pension Fund, the Merseyside Pension Fund, Deutsche Bank, the Prince of Wales’s Charitable Foundation, the Trust for London and the Highwood Foundation.
The fund works by providing up-front investments of up to £3.5m through the bonds, which are then repaid, based on the results of the schemes the bonds are supporting.
The Bridges Social Impact Bond Fund has a 10-year fund life with a four-year investment period, and there are plans to invest in 10 to 15 opportunities.
Governments Hold Key To Unlocking Billions For Social Good: G8 Report
Astrid Zweynert – Reuters
Governments can unleash billions of dollars to tackle social problems more effectively if they take bold steps to reduce barriers to investing for both profit and social good, a task force set up by the world’s richest nations said on Monday.
In its first report, the G8 Social Impact Investment Task Force calls on governments to make tax and regulatory reforms to catalyze the market in investments that generate social or environmental benefits alongside financial returns.
“This is not about increasing or reducing public expenditure, but helping government to benefit from innovation and private sector capital in order to achieve more impact with the money it has,” Ronald Cohen, the chair of the year-old task force, said in a statement.
The report highlights the potential of so-called “impact investing” to help solve some of society’s most pressing issues, such as caring for children and the elderly, community regeneration, financial inclusion, housing and prisoner reoffending.
The Long Haul
The Economist
Sir Ronald Cohen is not a man to bet against lightly. He was a pioneer of the European venture-capital and private-equity industries before turning his attention to “impact investment”, a way of investing that targets both financial returns and measurable social benefits. He was involved in the birth of the world’s first social impact bond (SIB), a financial instrument that is using private capital to fund a prisoner-rehabilitation scheme in the English city of Peterborough, and which will repay investors through the government savings it enables. Sir Ronald was also the first chairman of Big Society Capital, a British financial intermediary designed to catalyse the market for impact investment.
His latest move is to present the concept of impact investment to the wider world, by chairing a G8 task force on the issue set up last year. In a report published on September 15th, it delivered its recommendations on how to push forward a market that is currently fairly small but is now starting to attract lots of interest. That attention stems from a confluence of factors: governments keen to be more efficient in their spending, rising investor interest in solving social problems while making money, and concrete examples—like SIBs, which have attracted $100m in investment to date—that people can latch on to.