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Social Enterprise Investment Fund LP

We are pleased to announce that we have achieved a first closing of the Big Issue Invest Social Enterprise Investment Fund II L.P. (SEIF II) at just over £21 million. Following on from the success of Big Issue Invest’s first investment fund (SEIF I), which is now fully committed, SEIF II is seeking opportunities to invest in businesses with ambitious social impact goals whilst aiming to deliver robust financial returns to investors.

The substantial first close amount was achieved with the support of two significant cornerstone investors, HSBC and Big Society Capital, existing investors from SEIF I as well as new investors, including the Joseph Rowntree Foundation and the Bank Workers Charity. Fundraising for the Social Enterprise Investment Fund II continues with a goal of bringing the total fund size to £30 million sometime in 2016.

Big Issue Invest’s Managing Director, Ed Siegel, commented, “We are delighted to have closed the first stage of the Fund at just over £21 million. By proving that social enterprises can deliver social, environmental and financial returns, we can create a sustainable source of capital to drive positive social change. We are also pleased to have maintained the investment momentum we have had over the last couple of years thanks to another pioneering group of social impact investors.”

Richard Cole, Global Head of Principal Investments at HSBC, says, “We are pleased to be a cornerstone supporter of the Social Enterprise Investment Fund II and to support Big Issue Invest. This is a small but important part of HSBC’s continuing backing for small businesses and social enterprises across the UK”.

Ben Warren, Investment Team, Big Society Capital, says, “Big Issue Invest has a great track record of raising investment and we are very pleased to support them with this fund. They are experts in providing a range of innovative financial solutions to some of the most difficult social problems and we look forward to working with the team as they continue to support a diverse range of charities and social enterprises across the UK.”

Immediately following the first close, Big Issue Invest completed a number of investments which total £4 million in commitments, a fantastic start for any such fund. Some of the first investees of SEIF II include:

o Care and Share Associates (CASA): CASA provides domiciliary care in the North of England. An employee-owned business, CASA employs 750 staff who deliver 20,000 home visits per week to 1,000 clients, ranging from short calls to 24/7 care.

o The Mental Health and Employment Partnership: An innovative ‘social impact bond’ investment designed to help people with profound mental health issues secure work placements.

o London Early Years Foundation: Fast-growing nursery school business currently managing 34 nurseries across London, providing high quality childcare to over 3,365 children per year, 46% of whom were on partially subsidised places in FY15.

Big Issue Invest’s first Social Enterprise Investment Fund (SEIF I) demonstrated the significant social benefits that this kind of Fund can unlock. Over five years, SEIF I enabled the expansion of vital core services that form the backbone of our social welfare; bringing additional nursery school places and increasing the capacity of social care providers. At the same time, the Fund has pioneered investments into innovative service solutions that tackle some of the toughest, intractable social problems. From homelessness and severe social exclusion to financial exclusion and youth unemployment, the Fund is supporting social innovators who are bringing new approaches to their sectors and leading the way in service development. The legacy of these investments will extend beyond the lifetime of SEIF I, leaving social enterprises stronger, more sustainable and at the forefront of the fight against poverty and exclusion.

SEIF I

The investment objective of BII’s Social Enterprise Investment Fund LP is to provide growth capital to high impact social enterprises and financial and social returns to investors.  This fund is a ten-year, closed-ended Limited Partnership able to accept direct investment by qualified investors as Limited Partners (LPs) as well as donations via a Charity LP. The fund closed in March 2013 having raised a total of £9.2 million from 21 investors, including corporates, foundations and high net worth individuals.

Criteria

BII’s Social Enterprise Investment Fund invests in social enterprises based in the UK that meet the following criteria:

  • Clearly identifiable, high value social or environmental impact
  • A robust business model which is either scaleable or replicable
  • A strong management team with proven capability to deliver
  • In general, a history of positive cash generation or a clear near term path to cash and surplus generation
  • Operations based in the UK, although up to 10 per cent of the Fund’s capital may be invested in social enterprises which are based in the UK but have operations overseas.

The Fund targets five priority social mission areas:

  • Jobs, Education and Training – increased access to education, training and sustainable employment for disadvantaged groups.
  • Health and Social Care – innovation and improvement in health and social care services for the vulnerable and people with disabilities.
  • Environment – community-driven renewable energy and resource conservation enterprises that create local economic opportunities.
  • Financial Inclusion – access to financial services for low-income consumers excluded from mainstream provision.
  • Community Development – acquiring, regenerating and developing community owned assets, including land and property, that benefit local people in deprived urban and rural communities.