Major backers announced for new social investment fund launching to tackle inequality
Melanie May | 14 April 2022 | News
A new social investment fund designed to tackle inequality has received the backing of Bank of America and Access – the Foundation for Social Investment.
The Growth Impact Fund is a potential £25 million social investment fund being developed by UnLtd, Big Issue Invest and Shift, and set to launch later this year.
It will be available to professional investors, and aims to tackle inequality and promote racial justice by being built around the needs of entrepreneurs historically locked out of social investment, as highlighted by the recent Adebowale Commission on Social Investment.
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The potential fund will offer flexible and patient capital for social businesses to grow their impact, ringfencing a minimum of 50% of funding for leaders from underrepresented backgrounds.
For the past 18 months, social entrepreneurs of diverse genders, ethnicities, disability, age, and more have been working with the three organisations to design and develop a social investment fund for social enterprises working to ease societal inequalities.
The Growth Impact Fund aims to make social investment work better for social businesses by:
- Offering investees flexible capital, with options including 70% of funding invested through equity and quasi-equity products.
- Offering grant funded wrap-around support across the investment process (from early stage enterprises to established organisations, and pre-investment to post investment)
- Addressing sector representation by ensuring that the team, management and governance of the fund are more representative of the Founders the fund looks to support.
The funding will go towards investing directly in founding teams, as well as the technical assistance fund, a grant pot that will enable social entrepreneurs who face barriers to access to start their investment journey. This could be used to fund, for example, childcare, transport, marketing support or other associated costs.
Bernard Mensah, President of International at Bank of America, commented:
“Through the Growth Impact Fund, we hope to catalyse and unlock finance for social entrepreneurs where it is most desperately needed. We are committed to helping tackle social inequality today and the building of sustainable solutions for the next generation and beyond.”
Head of Investment at UnLtd, Mathu Jeyaloganathan, said:
“The Adebowale report highlighted that the social investment sector has not done enough to prioritise the needs of social enterprises, and in particular that it has serious problems with race. This fund was created to address that. As passionate as we at UnLtd are about change, it won’t be possible without the help of like-minded investors and partners, so we are absolutely delighted that both Bank of America and Access have come on board to make social investment work better for social entrepreneurs.”
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.