Big Society Capital: UK social investment market worth £2bn
The social investment market is growing, according to latest figures released by Big Society Capital (BSC). Investments outstanding at the end of 2016 amount to £1,950 million, an increase of 30% compared to 2015 figures.
BSC estimate that the 3600 investments it has identified mean that at least 3,000 different charities and social enterprises have now taken on social investment.
Average deal size rose significantly in 2016, from £108k to £144k. The report cited a decrease in lending by the Key Fund, which primarily provides small loans, as the reason behind this increase.
Social investment in social property more than doubled from £51 million in 2015 to £130 million in 2016.
The amount of deals that were agreed in 2016 is also up on the previous year, from £427m in 2015 to £630m in 2016 – an increase of 47%. BSC's market share also increased, from 4% to 7% over only a year.
Others making up that market include ordinary investors buying community shares, social bank lending from institutions such as Triodos or Unity Trust Bank and investments into social impact bonds.
The size of the UK social investment market is still smaller than predicted five years ago. A 2012 report by the Boston Consulting Group, commissioned by Big Society Capital, predicted that new deals would have grown to over £1bn by 2016.
But the figure for the total amount of social investment in this country could be higher than £3bn. A report commissioned by RBS a year ago included social investment made by mainstream banks.
One of the authors of the report, David Floyd, suggested in an article for Pioneers Post that the main factor inhibiting the take up of investment from the social enterprise sector has been the public sector not outsourcing contracts of a size and type which suit social enterprises and charities.
He cited the need for government to do more to break up public services contracts into smaller chunks that make it easier for them to be won by social enterprises.
Photo credit: Benh Lieu Song