Second regional Social Stock Exchange opens in Liverpool
The Social Stock Exchange (SSX) is to launch a pilot for the second of its regional stock exchanges in Liverpool and Wirral. Extensive research by SSX has identified 108 potential companies that might want to be listed on the exchange, who would collectively want to raise £75m.
Since inception in 2013, 35 firms are now listed on the SSX. It is both for businesses who want to raise capital and investors looking to put money into businesses that seek to achieve a positive, environmental or social impact. The first regional SSX was launched in the South West of the UK.
Some of the better known names on the exchange include green energy provider Good Energy and Golden Lane Housing, who provide accommodation for people with learning disabilities. Companies who want to list on the exchange have to apply and provide a social impact report to an independent admissions panel; more than 50% of applicants fail.
Anyone can set up an account with an online stockbroker to buy shares in the companies listed on the exchange and CEO of the SSX Tomás Carruthers is keen to see individual investors get involved: “Impact investing will not work if it is the preserve of ultra high net worth individuals or the preserve of private banks like JP Morgan. Impact investing is only going to have some kind of credibility if it is something that normal people do. That’s a core reason why the SSX exists.”
Pioneers Post went to speak to Carruthers last week ahead of the launch today. Speaking both of the SSX’s theory of change and the decision to branch out regionally, he commented: “If we were established to address the market failure that prevents social entrepreneurs from raising risk capital to scale then I’m probably not doing my job very well if I’m sitting on my arse in the city of London. The idea is to move capital to the social entrepreneur rather than this late 19th century idea of the entrepreneur coming to London with his begging bowl to get a financier interested in his project. That’s not the way to do things in the 21st century.”
We need to go to where the social impact is being achieved by social entrepreneurs and that means places of great need
He went on to speak about the potential for social change that could be achieved: “We need to go to where the social impact is being achieved by social entrepreneurs and that means places of great need. Liverpool is a place of great need. There is extraordinary deprivation in Everton along with significant wealth in Formby.”
Carruthers went on to explain the wide spectrum of needs in Liverpool and Wirral, ranging from children who need life chances (something as simple as making sure a child has breakfast in the morning and turns up to school in clean clothes) to an ageing population that needs looking after due to young people moving out due to lack of employment opportunities. There are also many environmental concerns to address.
The local exchange has the backing of Liverpool and Wirral councils with Mayor of Liverpool, Joe Anderson, commenting: “This is a really simple concept that could be a game-changer for responsible businesses.
Cllr Phil Davies, Leader of Wirral Council, said: “Our region has a proud history of successfully marrying investment with social improvements, not least the Lever Brothers’ Port Sunlight village, built to house their workers.
“The Liverpool and Wirral Social Stock Exchange will pair up investors with social enterprises in mutually beneficial relationships that will pay dividends for the people of the region as a whole. I am keen to welcome new investment into the borough, and the opportunity to build a strong, sustainable Wirral."
Carruthers also hopes that the successful establishment of the local exchange will boost the local social economy. “We believe there will be a lot of interest from people in Merseyside who want to invest in pro social businesses in their own community. Wouldn’t it be brilliant if the dividend streams and the interest payments on fixed income securities were going to pensioners and local people on Merseyside rather than it all going into the hands of some faceless American private equity firm?”
Photo credit: Stuart Beards