The UK’s social investment market is now worth over £3.5 billion according to the latest estimate by Big Society Capital, with 30% growth for the third year in a row.
Big Society Capital’s research also shows a greater increase in the number of social impact investment transactions between 2017 and 2018 (1023) than in previous years (755 between 2016 and 2017). The transactions are largely helping organisations requiring smaller loans or those unable to access mainstream finance, such as loans from high street banks.
Jeremy Rogers, Chief Investment Officer, Big Society Capital, said:
“The market’s impressive growth is being driven in part by increasing awareness of and confidence in taking on investment by social enterprises and charities. We have also seen growing interest in investing with purpose, which has prompted fund managers to create new and innovative products. This increase in products and capital has created more options for both investees and investors – helping capital to flow where it is most needed.
“We know that many of the issues social enterprises and charities are aiming to tackle, such as homelessness and financial exclusion, require significantly greater amounts of capital than is currently available to them. At Big Society Capital we work to connect this demand with interested investors. It is therefore fantastic to see this continued growth in the social investment market, helping to fund vital projects across the UK.”
Sarah Gordon, CEO of the Impact Investing Institute, commented:
“It is good news that the UK’s social investment market is continuing to grow. But we need to do more to make it easier for social enterprises and charities to access more of the capital that is so badly needed to address the social challenges we as a country face. Lowering some of the barriers that stop more capital flowing into impact investment will be one of the ways we hope to help further growth in the market.”
Big Society Capital is working to grow the amount of capital invested in the social impact investment market further with initiatives including:
- Helping with the creation of Access – The Foundation for Social Investment (Access), and the Access Growth Fund, a blended finance initiative aiming to increase the availability of smaller (less than £150,000) unsecured loans to social enterprises and charities – funded by the National Lottery Community Fund and Big Society Capital
- Developing the Charity Bond Support Fund, to support the development of the charity bond market by providing issuers and investors with the confidence they both need to see sustainable growth. The fund has helped the charity bond market grow from £30 million in 2014 to over £300 million in 2019
- Working as a cornerstone investor in the social property market, investing alongside others in specialist social investors such as Resonance, which has grown through partnerships with key investors from having no funds under management to creating and managing 7 funds worth over £210 million
- Working with Access and the Department for Digital, Culture, Media & Sport to establish Good Finance, a free website helping organisations navigate the social investment market, which now has over 100,000 unique users.
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