28 Feb Recap – Big Society Capital: February 2016 Happy Hour with the BSC team & panellists in impact investing
Our first happy hour of the year saw a full house at Big Society Capital, our partner institution in this exciting, first of its kind event. We were not only joined at the BSC headquarters by speakers from the organisation itself but also a panel made up of representatives from IVUK, CAF Venturesome and Social Finance.
The evening provided a full overview of the UK social investment market – including an interactive case study; how Big Society Capital invests and makes an impact; a panel discussion as well the various roles that exist in the space.
By way of background, Big Society Capital Limited (BSC) was the world’s first ever social investment institution of its kind, established by the Cabinet Office and launched as an independent organisation with a £600m investment fund in April 2012. As an independent social investment institution, it provides finance to organisations that support frontline social sector entities tackling social issues to help them grow.
Simon Rowell (Senior Director, Strategy and Market Development at BSC) covered a number of themes during his presentations. Starting by explaining the social investment sphere and how BSC fits in to it, he briefly discussed how the BSC is mainly funded through dormant accounts and high street banks part of “Project Merlin”. He then went on to define how investment processes and stakeholders interact to benefit the social sector; the variety of different funding currently available in the market as well as what roles are available and who is confirmed to be hiring this year.
Candice Motran (Investment Director at BSC) then introduced the case of Midlands Together Group, whereby they worked in partnership with Triodos Corporate Finance to raise £3million through a bond issue to tackle the cycle of re-offending:
Background: It is estimated that more than 58% of short-sentence offending adults go on to re-offend within 12 months of being released, costing £9.5 – £13 billion to the UK economy due to not having a permanent address, limited employment experience and a criminal record causing a huge barrier to re-entering society.
Overview of the programme:
- to provide paid work, skills training and mentoring to 100-150 ex-offenders
- to buy, refurbish and sell approximately 15 properties per annum
Target capital to raise: £3million
Length of the programme: 5 years
- to significantly reduce the number of adults reoffending by providing ongoing experience and support
- to equip offenders with the confidence, training and experience required to secure future employment
The topic was then handed over to the audience who were put in the shoes of a potential investor looking at the case. The group was tasked to discuss the factors which should be considered when looking to invest in such a bond. The key concerns identified included the property market patterns (i.e. will there be a crash); support and monitoring of the ex-offenders once the project ended; the successes of similar projects and how we would be able to measure the social impact. Despite this, it was finally agreed by the group that it would be something worth investing in as the social benefits of the programme would outweigh any risk.
In the real world, Midlands Together did indeed secure investment from a diverse range of investors, including the BSC in October 2013. This meant the programme was able to be created and has subsequently had extensive national media coverage, including the Guardian & Financial times. A full breakdown of the case study and the outcomes can be found here: https://www.triodos.co.uk/business/raising-capital/653125/corporate-finance-case-study-midlands-together-bond-issue1
Last but not least, the floor was opened to questions. The panel, led by Sarah Davies (Talent Specialist at BSC) included Rebecca McCartney (BSC), Jared Tausz (IVUK), Nick Matthews (Social Finance) and Holly Piper (CAF Venturesome).
A key theme of the questions asked was on the employability and skills required for a role in impact investing. The reflection on this theme was two-fold; firstly, it depends on what sort of role you are applying for. Of course, if the job opening is for an investment role, you will need demonstrable experience of working with the required skillset previously. However, it was stressed that regardless of what role you are applying for, a true passion for social change is paramount. This can be demonstrated in a number of ways, albeit by having a previous position in the sector, volunteering for a cause, or even by taking an independent course.
To conclude, the impact investing space is rapidly growing and there are a plethora of companies on the spectrum looking for passionate candidates. The case study and the panel built on the importance of lateral thinking along with an avid awareness of social growth and development in order to succeed in the sector.