Social investment is now worth at least £1.5bn in the UK, according to a report by Big Society Capital.
Big Society Capital’s first comprehensive estimate of the size and composition of social investment in the UK shows that nearly 3,500 different social investments were outstanding at the end of 2015. It estimates that at least 3,000 different charities and social enterprises currently benefit from social investment.
The Big Society Capital report shows that over two-thirds (70%) of social investment is channelled to charities, and social enterprises with some kind of asset lock. The remaining 30% is focused on social enterprises and profit-with-purpose companies without an asset lock.
According to the report, higher-risk products are now a significant part of overall social investment. Social bank loans to asset-locked organisations are the single most prevalent product, with products such as social property funds (8%), unsecured loans (10%), community shares (6%), charity bonds (6%), and equity-like products (2%) emerging strongly in recent years.
Social investment deal-flow in the 2015 calendar year saw around £428m of deals offered to about 700 charities and social enterprises. According to the report, this seems to show that deal-flow has more than doubled in value since 2011, representing roughly a 20% annual growth rate, with much of the growth in deal-flow coming via higher risk products.
Matt Robinson, the outgoing head of strategy at Big Society Capital and author of the report said:
“We believe that social investment in the UK is now helping thousands of charities and social enterprises. We are seeing a diverse range of different investment products, with quite significant growth in higher-risk forms of capital such as unsecured loans, community shares and charity bonds. This research also shows that social investment deal-flow is growing, and is more than double the level of five years ago.”
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