Big Society CapitalInclusion London Event

Alastair Ballantyne – June 2013

History of Big Society Capital

2008 Dormant Accounts Act

2009 Government Consultation on “Social Investment Bank”

2012 Launch of Big Society Capital by Prime Minister

BSC 2012 Highlights:£56.6 million of investment commitments20 investments detailed in annual report

Big Society Capital – Building the Social Investment Market

HSBC Barclays

Lloyds TSB RBS

HSBC Barclays

Lloyds TSB RBS

Big Society Capital

Big Society Capital

Dormant AccountsDormant Accounts

Social Investment

Finance Intermediaries

Social Investment

Finance Intermediaries

Investors seeking to positive social impact and financial return.

Investors seeking to positive social impact and financial return.

Social enterprises requiring growth capital.

Social enterprises requiring growth capital.

£600m capital

Operating Principles

Independent Transparent Wholesale Self-sufficient

Big Society Capital’s role

INVESTOR

Grow the social investment intermediary market

Provide range of affordable and appropriate finance for frontline

social organisations

CHAMPION

Increase awareness and confidence in social sector and in

social investment

Work with sector to develop framework for evidencing social

outcomes

Create investible products for individual and institutional

investors

Work with UK and EU governments to encourage appropriate policy and tax

support for social investment

Big Society Capital Commitments - 4 broad types

Operating intermediaries– provide support to social sector organisations

General funds – increase supply of capital available to social ventures

Specialised funds – invest with themes such as sectors or regions

Social Impact Bonds – provide upfront capital for social ventures delivering services under Payment by Results contracts

Nesta Impact Investment FundNesta Impact Investment Fund

PURE Community Energy FundPURE Community Energy Fund

Essex SIBEssex SIB Social Stock Exchange Social Stock Exchange

Invests in social enterprises that use technology and innovation to solve social issues.

Invests in social enterprises that use technology and innovation to solve social issues.

Provides finance for community renewable energy projects.

Provides finance for community renewable energy projects.

NestaNesta PUREPURE

Supports intervention programmes for 11-16 year olds at the edge of entering care or custody so that they can safely remain at home with their families.

Supports intervention programmes for 11-16 year olds at the edge of entering care or custody so that they can safely remain at home with their families.

Social FinanceSocial Finance

Connects socially motivated investors with social purpose businesses that need capital.

Connects socially motivated investors with social purpose businesses that need capital.

Social Stock ExchangeSocial Stock Exchange

E.g.

SIFI

Appr

oach

What is an Intermediary?

InvestorInvestorInvestorInvestor

IntermediaryIntermediary

FrontlineFrontline

InvestorInvestorInvestorInvestor

FrontlineFrontline FrontlineFrontline FrontlineFrontline

Who are intermediaries?•Sector Bank•Specialist Fund•Social Impact Bond•Market infrastructure

What does an intermediary do?•Select investments•Monitor social & financial results•Diversify risk•Raise capital for future investments

Social Investment Finance Intermediaries

Social Funds

Social Enterprise funds

Specialised funds

Social Lenders

Social Impact Bonds

Investment Readiness

Bridges SIBFund

Social Investment Market CIC

SocialIncubator

Fund

Big Society Capital – How We Invest

Market development contributionMarket development contribution

Strong

We analyse our investments based on three criteria:

Social Impact PerformanceSocial Impact Performance Financial PerformanceFinancial Performance

Strong

Strong

Weak

Big Society Capital – Evidencing Social Value

• Social Mission: what is the promise of change? – vision and understanding of issues

• Governance: legal structure, mission locks, board, exit

• Activities: track record, management, financial/social impact alignment

• Impact: depth and breadth of impact, innovation, frontline delivery

• Impact Assessment and Measurement: assessment and screening, planning and targeting, monitoring and reporting, auditing

Social Organisations seeking Social Investment

Define Revenue Model

•Trading business

•Willing commissioners

•Buying an asset

Funding

•Advice

•Social Investment Funds

•Social Outcomes Funds

Developing a BusinessPlan and Evidence Base

•Venture philanthropy

•Government grants

•Non-government grants

Forecast growth in Social Investment supply and demand

(£m)

Source: The Boston Consulting Group

- Unsecured lending- Quasi equity- Outcomes based financing

Are you thinking about Social Investment?

Social Sector Organisation

Directory of Intermediarieswww.bigsocietycapital.com

Social Finance Intermediary

Online Expression of Interest www.bigsocietycapital.com