Advisers Join Forces For Social Impact Investing Event
Michelle Abrego – City Wire
Around 30 financial planners met in London last week to discuss the merits of social impact investing.
Social impact investing puts money into projects that deliver financial returns while having a positive social or environmental impact.
The first social impact bond was issued in February 2013. It was called the Future for Children Bond and raised money that went to Essex County Council to help children aged 11-16.
The London event was hosted at members club The House of St Barnabas, which is a social enterprise that runs an employment academy to help London’s homeless get back into work.
It was organised by social impact investment promoters Worthstone, which was founded by IFAs Alan Boswell & Company, BpH Wealth Management and Paradigm Norton Financial Planning.
British Firm Starts Hedge Fund For Social Services
Jenny Anderson – NY Times
When a potential hedge fund investor recently visited a mental health charity, he asked what the organization would need to help more people.
“Property” was the answer.
Cheyne Capital, a $6 billion hedge fund based in London, hopes to offer that with a new fund it is setting up to buy property that it will then rent to organizations that deliver services like affordable housing, aid for the elderly and care through the National Health Service.
The Cheyne Social Property Impact Fund, which was able to start investing on Thursday in Britain, aims to raise about 300 million pounds with target returns of 10 to 12% with leverage. It is expected to charge investors about a 1.5% management fee and a 10% performance fee after it hits a return rate of about 6 percent.
“There is a tremendous social need for this,” said Shamez Alibhai, who will head the investment team and who has worked in real estate for 13 years. He has been at Cheyne since 2006.
As recently as 2012, government grants for social housing were about £2.5 billion to £3 billion, Mr. Alibhai said. Those funds were reduced to nearly £500 million after the British government cut expenses in the financial crisis.
“That’s £2.5 billion of capital withdrawn from the system,” Mr. Alibhai said. “We hope to play our part replacing some of that.”
The fund aims to balance financial and social returns. It is part of a growing trend of investing with an eye to improving society as well, an effort that includes so-called social impact bonds.
Big Society Capital, a government-established finance group with a social mission, anchored the Cheyne fund with a seed commitment.
The group’s CEO, Nick O’Donohoe, said Cheyne was an “interesting partner.”