September Finance Bulletin: BII reveals new CEO

BII reveals new CEO, Impact investing takes root on 6 continents, Palladium buys Enclude, £500k for London charities, South Africa’s first early childhood development impact bond, GIIN highlights huge SGD funding gap…

Big Issue announces new social investment chief

Leading UK social investor Big Issue Invest has announced the appointment of Danyal Sattar as its new Chief Executive Officer.

Danyal will join the social investment arm of The Big Issue on 3 December, from The Joseph Rowntree Foundation (JRF), where he held the role of Head of Social Investment.

BII said that Sattar had “cemented a reputation as one of the most respected leaders in the impact investment sector”. During his tenure at the JRF, the organisation invested £15m in charities and social enterprises, in line with their solving UK poverty mission.

Sattar was one of the six co-conveners of the Social Impact Investors Group, which coordinates social investment activity amongst UK trusts and foundations.

Before The Joseph Rowntree Foundation, Danyal worked for Big Society Capital and the Access Foundation. He also spent time at Esmee Fairbairn Foundation managing their social investment fund and environmental grant making. Prior to that, he held a position at Charity Bank in the lending team. He has also held roles at the Brussels-based network International Association of Investors in the Social Economy, the UK Sustainable Investment and Finance Association, local investment fund the Aston Reinvestment Trust, and at the think-tank New Economics Foundation.

BII also revealed that Daniel Wilson-Dodd, its Head of Lending, will assume the role of Deputy Chief Executive. Danny originally joined Big Issue Invest in 2012 as an Investment Analyst.

Nigel Kershaw, Chair of The Big Issue Group, said: “Danyal is one of the most respected pioneers and leaders in social and environment investment. For more than 25 years, he has helped create and forge our sector and I am so excited to have him onboard to play an instrumental part in The Big Issue Group’s mission to dismantle poverty in the UK.”

“We believe Danyal, Danny and the SMT will be a formidable leadership team, building on the great work of all our staff past and present at BII and the invaluable support we have had from the organisations we have helped over the last 13 years.”

Big Issue Invest provides finance and support to social enterprises and charities seeking to dismantle poverty and create opportunity for people across the UK. It invests between £20k and £3m in organisations seeking repayable financing options, helping them to scale up and maximise their social impact. Since launching in 2005, BII has invested in over 350 organisations, and currently manages or advises on £192m of social funds.

Impact investing movement takes root in all six continents with new advisory boards in Bangladesh, New Zealand, and South Africa

Bangladesh, New Zealand, and South Africa will be the latest countries to launch national advisory boards (NABs) to promote impact investing in their respective regions, bringing the impact movement to all inhabited continents around the globe.

The three countries join the 18 existing countries and the European Union in the global network established by the Global Steering Group for Impact Investment (GSG) in response to the G8 Social Investment Task Force. 

“The impact revolution is a truly global movement, and its expansion to Bangladesh, New Zealand, and South Africa underscores that the pivot to risk, return, and impact is spreading to all corners of our world,” said Sir Ronald Cohen, founder and chair of the GSG.

The GSG’s Board of Trustees approved the new member countries amid preparations for the upcoming annual Impact Summit on 8-9 October in New Delhi, India where 900 impact investment leaders from over 50 countries will welcome the new NABs alongside four new $1 billion Funds, new research from GSG Working Groups, McKinsey, KPMG & Intellecap and 150 guests including former US vice-president Al Gore, Prince Max of Liechtenstein, Ratan Tata, Sunil Kant Munjal, Darren Walker, Cheryl Dorsey, and, Reema Nanavaty. 

“Our 21 national and regional advisory boards now represent 3 billion of humanity and reflect the growing momentum of the impact movement,” said Amit Bhatia, CEO of the GSG. “We welcome the 3 new NABs to our global network, and look forward to expanding our footprint to achieve scale and impact.”

Futuregrowth the only institutional investor in SA’s first ECD social impact bond

Specialist investment company Futuregrowth Asset Management, acting on behalf of client funds, recently concluded an investment in the Impact Bond Innovation Fund (IBIF), a South African outcome-based financing mechanism that seeks to improve early childhood learning and development (ECD) outcomes in the Western Cape. 

The capital has been invested through the Futuregrowth Infrastructure and Development Bond Fund, a specialist yield enhanced bond portfolio. The fund targets investments that facilitate infrastructural, social, environmental and economic development in South Africa.

The IBIF, a social impact bond, is the first ECD-focused transaction of its type in the Global South. The transaction has been structured and led through an intermediary partnership between mothers2mothers (m2m), an international nonprofit organisation, and Volta Capital, an international impact investment structuring specialist. Futuregrowth is the only institutional investor in the bond. 

David Torres, Senior Advisor to the CEO at m2m, said: “We are excited about the potential of the IBIF to create a new source of ECD funding, establish a benchmark for proven ECD programming, and promote the adoption of rigorous performance management systems for the ECD sector.”

A social impact bond (SIB) is a contracting and financing mechanism where socially motivated investors pay for social services upfront and are repaid by outcomes funders, in this case the South African Government through the Department of Social Development and ApexHi Charitable Foundation, if pre-agreed outcome targets are achieved. 

“In this case the SIB is a three-year debt investment whereby investors are repaid, with interest when specified social outcomes are achieved,” said Michelle Green, an investment analyst at Futuregrowth.  

“This is in contrast to traditional contracting methods where governments pay for a set of inputs or activities upfront that may or may not lead to intended outcomes. Impact Bonds and Outcomes Based contracts more broadly provide donors, foundations, financial organisations and governments a way to introduce competitive efficiencies, normally associated with the private sector, into the public and non-profit realm, thereby ensuring social and environmental programmes deliver maximum impact,” Green said. 

Over the term of the loan the IBIF, through the Western Cape Foundation for Community Work, will seek to improve the cognitive and socio-emotional development outcomes of 2,000 children in the low-income communities of Atlantis and Delft in the Western Cape.

ECD is recognised as one of the key mechanisms for breaking the intergenerational cycle of poverty in South Africa. Overwhelming scientific evidence confirms the tremendous importance of the early years for human development and the need for investing resources to support and promote optimal child development from conception.

If successful, the model will be replicated across the Western Cape, and then nationally; applied by the Government to other social interventions, thus creating opportunities for blending public capital and private capital, and crowding-in new funding to underfunded programmes.

“Impact Bonds give donors, foundations, financial organisations and governments a way to introduce competitive efficiencies, normally associated with the private sector, into the public and non-profit realm, thereby ensuring social and environmental programmes deliver maximum impact,” Green added. 

“As government resources are finite, SIBs are a way of crowding-in private sector funding to help Government implement critical social impact initiatives, which we at Futuregrowth believe to be critical to the development of the South African economy and social landscape.” 

Palladium Buys Enclude from Triodos Bank

Global impact firm Palladium has acquired financial advisory firm Enclude to merge with its economic development and impact investing practices. 

Palladium has bought Enclude from Triodos Ventures, an independent fund managed by Netherlands-based Triodos Bank which is a pioneer in sustainable values-based banking. The acquisition will deepen Palladium’s technical expertise, while allowing Enclude to scale its efforts and impact. Triodos Ventures will become the first institutional shareholder in majority staff-owned Palladium.

Established in 2012 as the merger of ShoreBank International and Triodos Facet, Enclude provides capital advisory and capacity building services to help drive inclusive, sustainable growth in developing economies, by working with entrepreneurs and impact investors. 

The company has three main offices (Netherlands, the US, and the UK) and is represented across the world. Its capital advisory business offers investment banking services for companies that are seeking to make a positive impact and is regulated by the UK’s Financial Conduct Authority (FCA). These services include raising capital and managing responsible exits for investors. So far, Enclude has mobilised over USD500 million in capital for impact investing transactions. 

Palladium is a AUD500 million company with 2,500 employees across 90 countries worldwide. The company recently designed the world’s first Development Impact Bond (DIB) in healthcare to reduce mother and infant deaths in Rajasthan, India. Palladium’s latest impact investment was a cash boost to female-owned Naasakle to support more than 5,000 women shea nut pickers in northern Ghana. 

“To meet the UN Sustainable Development Goals, we must tap private capital,” said Laurie Spengler, CEO of Enclude. “Joining Palladium will allow Enclude’s capabilities to be leveraged for greater reach and results.”

Christopher Hirst, incoming CEO of Palladium, said: “Making the world a better place is resource intensive, and we want to transform how development is financed in the future. Our vision is to bring a commercial approach to international development, unlocking vast sums of private capital for multiple projects around the world. These new models ensure accountability and full transparency in the process, and ultimately, improve people’s lives.”

Peter Blom, CEO of Triodos Bank, added: “Palladium’s acquisition of Enclude presents a great opportunity for the Enclude impact investing advisory services to develop scale and to accelerate their ability to create impact. We are proud to have been part of the early history of Enclude and we are happy to stay connected to future developments through our shareholding in Palladium.”

£500k to help London organisations step into social investment market

Nearly half a million pounds has been awarded to support charitable organisations across London, UK, looking to get their foot on the ladder of the social investment market.

The City of London Corporation’s charitable funder, City Bridge Trust, and UBS have awarded a total of £429,240 to 12 London organisations through their fifth round of the social investment programme Stepping Stones. This brings the total awards given to £3,231,340 to 77 organisations since the launch of the fund in 2015.

City Bridge Trust, which is London’s biggest independent grant giver, and UBS launched the Stepping Stones Fund to support charities and social enterprises in London who want to access the social investment market. Funding helps organisations develop their ideas, bring in new technical assistance and get products ready for market.

The latest round of grantees range from employability programmes helping young people into work to a social enterprise helping new parents transition into parenthood.

One grantee, Strengths in Communities CIC, is a social enterprise specialising in supporting parents in the early stages of parenthood and ensuring babies have the best start in life. Life changing skilled support is offered during pregnancy, birth and beyond to mothers, fathers and babies.

Another, Talawa, is a charity working to address the lack of diversity in the theatre industry, addressing barriers to entry, as well as support for those at the early stage of their careers. London-based but with a national remit, Talawa stages theatre productions, holds readings of works from promising black writers, and offers feedback on scripts.

Alison Gowman, Chairman of City of London Corporation’s City Bridge Trust committee, commented:  “We have given funding to a whole host of exciting initiatives, ranging from programmes giving careers a kickstart to organisations promoting social mobility and diversity in the workplace.”

Sarah Wallbank, Chief Executive of Yes Futures, added: “The grant will be a huge catalyst in enabling us to develop our programme model and team capacity in order to raise future social investment, so we can meet the increasing demand we are getting from schools for our programmes, and substantially grow our impact to many thousands of young people across the UK.”

Nick Wright, head of Community Affairs at UBS, said: “We are delighted at the impact the partnership with City Bridge Trust has made in helping to support the development of this important market.  While more remains to be done, the Stepping Stones Fund has enabled a larger and more diverse range of social businesses to explore and prepare for social investment.”

City Bridge Trust is the funding arm of the City of London Corporation’s charity, Bridge House Estates. It is London’s biggest independent grant giver, making grants of £20m a year to tackle disadvantage across the capital.

The Trust has awarded around 7,900 grants totalling over £380m since it first began in 1995. It helps achieve the City Corporation’s aim of changing the lives of hundreds of thousands of Londoners

UK property group announces largest social dividend in a decade

Andrews Property Group has announced its largest dividend payment to shareholders since 2004. Between them, Andrews Charitable Trust (ACT) and Speaking Volumes will share a payment of £1m.

Andrews Property Group is owned by these two charitable trusts which together benefit from the profit the business generates. This is unique within the property sector and reflects the philanthropic work of its founder, Cecil Jackson Cole. Since 1985, the business has paid out over £10m.

In an age where estate agents are amongst the least trusted professionals and the property market comes under continued scrutiny, Group Chief Executive David Westgate believes Andrews’ investment in good causes allows it to stand out as a business doing things differently: “From day one, Andrews has ensured that the communities that we’re part of benefit from what we do. But we need to remain visionary and ensure that our work continues to be relevant and make a difference.

“Today’s dividend announcement shows the commitment and hard work of the entire Andrews’ family to ensuring that the foundations on which we were built remain relevant and life-changing.  I’m, therefore, delighted that we’ve been able to increase our payment this year so significantly.”

85% of the dividend payment will be received by Andrews Charitable Trust which focuses its work on supporting ventures that tackle the link between poverty and housing. A major focus for ACT is Establish, the innovative housing scheme that was launched as part of Andrews’ 70th anniversary celebrations in 2016.  It aims to purchase 50 homes, in areas where Andrews has a presence, over the coming 50 years as a means of supporting young people leaving the care system.

Sian Edwards, Executive Director at ACT, said: “We’re a charity with a mission to alleviate poverty and homelessness and with most of our funding coming from Andrews Property Group, it makes sense that we tackle this from a housing perspective.

“Access to safe, decent housing can be the foundation stone for so many other benefits and life improvements, and the work that is already being achieved through [establish] bares testament to this. The funds received from Andrews today will make an enormous impact on moving this programme forward.”

Two [establish] houses have already been launched. The first was in Bristol near to the Andrews’ head office, whilst a second was launched in Croydon, South London. It is anticipated that a further two homes will be announced before the end of this year.

David Westgate added: “Establish is about so much more than just giving young people a roof over their heads.  We’ve committed to not only providing newly renovated homes, but to ensuring they come with ongoing support and maintenance; that the young people who live in them are given access to specially-trained Andrews’ mentors and that, if they’re interested, they can take up paid apprenticeships with Andrews.

“It’s all about combining what we do best, property, with what our local charity partners do best, support and guidance.  It also means that for the entire Andrews’ team, there’s a real focus in what it is we do each day.  Yes, we sell and let properties, but we do so in the knowledge that the value we generate makes a real difference. 

“That makes us, we believe, a property business doing things genuinely differently.”

GIIN highlights huge funding gap to achieve Sustainable Development Goals

The Global Impact Investing Network (GIIN) has published a new report, Financing the Sustainable Development Goals: Impact Investing in Action, that reiterates the need for impact investors to raise and direct new capital to help meet the United Nations’ Sustainable Development Goals (SDGs) by 2030.

With an estimated $5-7tn needed annually to achieve the goals, the report said it was clear that more capital, deployed by investors whose aims align with these goals, was an absolute requirement. The report, released in advance of the agenda for the UN’s Global Goals Week, Sept. 22-29, showcases the potential for impact investing to catalyze progress towards these goals.

Amit Bouri, CEO and Co-founder of the GIIN, said: “The SDGs are an embodiment of the global agenda for development, and if we are to meet them by 2030, the collective effort of governments and private organizations needs to scale at a much faster pace. Despite some early progress, the need is more urgent than ever to inject new capital into high-impact businesses that address critical social and environmental challenges.”

Bouri added: “It isn’t enough now to simply ‘tag’ relevant investments to SDG issue areas, although this is a good first step. What the world urgently needs is significantly more investment capital being channeled to these social and environmental priorities. The SDGs have been called ‘the world’s hardest to do list’, but with the help of leaders in the private capital markets, they may be achievable.”

Government and National Lottery backed #iwill Fund supported by Oxfordshire Community Foundation with The Good Exchange

Oxfordshire Community Foundation (OCF), funded through the #iwill Fund, is working in partnership with The Good Exchange’s not-for-profit, online matching cloud platform.

The #iwill Fund was created through £40m of seed funding from Government, and the National Lottery through the Big Lottery Fund. It supports the aims of the #iwill campaign, to embed meaningful social action into the lives of young people. This includes activities such as campaigning, fundraising and volunteering, all of which enable young people to make a positive difference to their communities.

Oxfordshire Community Foundation is acting as a match-funder and awarding grants on behalf of the Fund via The Good Exchange platform.

“We’re delighted to be supporting the #iwill Fund to increase participation in social action from young people from lower social economic groups and those who might not usually take part in these types of activities,” said Jayne Woodley, CEO of Oxfordshire Community Foundation. “Working with The Good Exchange, we will be able to streamline the application process, reach and collaborate strategically with other funders to provide match funding, and encourage applicants to drive donations and fundraising of their own to help them meet the qualification criteria.”

By bringing together funders from across different sectors and by making sure that young people have a say in where the funding goes, the #iwill Fund is taking a collaborative approach.

“The immensely positive impact of funder collaboration on the overall success of campaign fundraising is well proven, and we’re delighted to be involved in facilitating this compelling incentive for the #iwill campaign,” said Ed Gairdner, COO of the Good Exchange. “We’re in full support of the campaign’s overarching objective: to make involvement in social action a part of life for young people, recognising the benefit for both themselves and their local communities. We are delighted that OCF has chosen to partner with The Good Exchange to expedite the process and help find matching funders.”

The #iwill Fund prioritises projects that embed skills in young people and the wider community as part of their delivery, and which clearly demonstrate principles of great youth social action. As part of the current round of funding, OCF has already awarded £5,000 to arts charity The Story Museum for their ‘Young Producers’ project, and will be making grants on a rolling basis until the #iwill funds are spent. Other groups should therefore consider making applications as soon as possible.

Grants made through OCF’s previous #iwill funding have already made a demonstrable difference to local communities. The Didcot TRAIN Youth Project works with young people who are at risk of educational failure, crime, child sexual exploitation, and alcohol and substance abuse. The project received #iwill funding for its Young Leaders Programme, which created a virtuous circle by enabling young people to help themselves and then to help others. Oxford Hub’s Schools Plus programmehas used #iwill funding from OCF to place student volunteers in tutoring placement across 13 schools in Oxford City. The pupils improve their academic attainment in different subjects; while young volunteers develop new skills in team work, communication, tutoring and leadership.

Strong growth for good money in 2018: EIRIS Foundation releases latest market estimate for UK green and ethical funds

Investment in UK green and ethical funds has shown strong growth with a jump to just over £19bn, according to the latest figures compiled by the EIRIS Foundation. The Foundation, a charity working in the area of responsible investment, released the estimate ahead of the annual UK’s Good Money Week campaign. This figure is based on research which considers funds under management figures of UK domiciled green and/or ethical retail funds. This year's estimate, significantly up from just over £16bn in 2017, highlights a growing interest among consumers for investments that take a range of environmental and societal issues into account.   

Peter Webster, CEO of the EIRIS Foundation, said: "This latest figure doesn’t come as a surprise to those working in the sector. Numerous sources, from fund houses to individual advisers have reported a steady increase in interest from retail clients in what the green and ethical market has to offer. The EIRIS Foundation’s vision is a financial and corporate system that encourages sustainable and responsible wealth creation. It’s clear from these figures that many retail investors are eager to play their part in moving in that direction. We look forward to even stronger growth in the future as we work with others to build a more sustainable economy." 
 

Abundance launches new onshore wind investment opportunity

Abundance, the UK peer-to-peer ethical investment platform, has launched the opportunity to invest in a portfolio of operational medium-scale wind farms, owned by E2 Energy, an Arena Capital company.

Onshore wind remains one of the most popular energy generating technologies in the UK, across the political spectrum, as well as being the cheapest source of new power.

The debentures issued by E2 Energy offer an effective annual return of 5% for 16 years with interest and capital paid every six months. Proceeds will be used to refinance a 1 MW portfolio of eight operational wind turbines located on farms in the North of England. The turbines are all receiving the Feed-in-Tariff subsidy.

Bruce Davis, co-founder and managing director, Abundance, said: “For the first time in two years, we’re delighted to bring our customers a wind energy investment. These are becoming increasingly rare for ordinary investors, with new development stymied by out-of-touch government policies. The public loves wind power, and this investment from E2 Energy has the additional benefit of supporting Britain’s farmers too. Abundance is proud of our win-win record on investments, but this time there’s a triple whammy - E2 Energy is a win for wind power, for farming, and for our investors looking to achieve their financial goals.”

E2 Energy is owned by Arena Capital Partners Ltd, based in Dublin, which has installed or acquired over 70 turbines since it was founded in 2014. E2 Energy’s turbines were all installed between 2012 and 2016, so have a proven energy generating track record, and all benefit from Feed-in Tariffs.

Ian Greer, Director, Arena, said: “We are proud to be involved in the provision of renewable energy and to assist in the decarbonisation of our energy sources, while at the same time providing local jobs and energy security. We focus on medium scale wind turbines in rural areas and predominantly on farmland. Where possible, we sell some of the electricity back at below retail market rates to the farmers so that they can benefit from the electricity produced on their land. The funds used from this offer will be used to acquire other similar wind turbines.”

The total on offer is £2.m. As with all Abundance investments the minimum is just £5 and investments are eligible to be held in the Abundance Innovative Finance ISA so returns may be tax free.

To find out more or download an offer document, visit:  https://www.abundanceinvestment.com/investments/e2-energy