Big Issue Invest deploys £100m: what’s next for the UK social investor?

What could you do with £100m? Sign one of the world’s top strikers? You could book yourself 2,000 nights in the penthouse suite of the most expensive hotel in the world (the Hotel President in Geneva, apparently). Or pay for a year’s rent on a Chagos Island military base, if you’re UK prime minister Keir Starmer.

What did Big Issue Invest do with £100m? We invested it in hundreds of organisations that work to end poverty and inequality in the UK. Social enterprises, charities and businesses with a social purpose from Edinburgh to Penzance have benefited from our loans and grants.

Back in 2005, John Bird and Nigel Kershaw created us in the same vision of our world-famous sister street paper – we’d exist as a ‘hand-up, not a handout’ for businesses who wanted to do good for their communities. We were conceived to give our investees a financial jumpstart so they could grow and operate on a bigger, more sustainable scale, a scale from which they could pay us back. Getting them up on their feet so they, in turn, could get the people needing support up on their feet.

• Read more: Happy birthday! The Big Issue celebrates 25 years 

Just shy of two decades later and I’m proud to say our most recent deployment – a £3.2m loan from our Social Impact Debt Fund IV that’s helped a specialist education college for young adults keep its doors open – has propelled us over the line to a landmark milestone: £100m of investments made. All before our 20th birthday. Not bad going.

As we prepare to celebrate 20 years of Big Issue Invest later in 2025, I’ve been reflecting on our journey as a social investor and how the sector has shifted around us. What began as a largely uncharted sector when we set out on this mission has evolved and grown exponentially – yet the road ahead feels more uncharted still.

• Read more: UK social impact investments reach £10bn in 2023 but growth slows – Better Society Capital

Today we find ourselves operating in a testing landscape. The UK’s societal challenges have grown significantly, but the financial levers once used to respond to these challenges now face challenges of their own. Poverty in this country is at its highest level since the turn of the century. The number of Brits experiencing destitution, unable to feed, clothe and warm themselves, has more than tripled since the mid-2010s. And the two main levers of financing support for people in these desperate circumstances – public funding and charitable giving – are both strained and shrinking in the face of economic uncertainty.  

Sustainable social enterprise solutions have a greater role to play in delivering services and value to marginalised communities. How can we rise to meet the occasion? 

Engaging mainstream capital markets

Social investors need to take stock and come to market in the competitive, agile style of the commercial sector. The most pressing challenge that faces social investors like Big Issue Invest is mobilising institutional and private capital to fill the void left by declining public funding. More must be done to engage mainstream capital markets in social investment, whether through public policy, regulation, or creating accessible impact investment products.

For social finance to achieve its true potential, policymakers must proactively drive the caretakers and fiduciaries of private capital – pension funds, banks, asset managers, financial intermediaries – to allocate private capital to social objectives. A more targeted and impact-related set of investment products must be provided to win their backing. 

• Read more: Is this the woman who can persuade pension funds to invest for impact?

In my experience, social-purpose businesses like charities or social enterprises often struggle to recognise the value of finance in driving growth in the fulfilment of their mission. We must help them see that it is not philosophically ‘wrong’ to use finance – debt, equity or quasi-equity – to deliver greater impact. 

As social investors, we must do more to provide the infrastructure and environment to be ‘finance friendly’ through easy-to-use platforms, low-cost advice and funding to facilitate financial readiness

Even when that philosophical dilemma is overcome, social enterprises are still ill-equipped to navigate the complexities of financial markets, understand what their own needs are, and ultimately be ‘ready’ to take on finance. As social investors, we must do more to provide the infrastructure and environment to be ‘finance friendly’ through easy-to-use platforms, low-cost advice and funding to facilitate financial readiness.  

• Read more: UK social investment making ‘slow and disappointing progress’ in meeting social entrepreneurs’ needs – Adebowale

Sourcing new capital is a perennial challenge for investors, and the commercial-like returns required to invest in future impact are difficult to achieve sustainably without scale. This is particularly true at Big Issue Invest, which operates as part of a wider social enterprise – the Big Issue Group – which reinvests its profit into delivery. If social investors cannot sustain themselves and, by implication, the social-purpose businesses that they are there to support, the societal challenges facing this country will just get bigger while the public purse gets smaller.

Harness the entrepreneurial spirit

Adapting and evolving is critical to fulfilling our sector’s potential. That is what we try to do at Big Issue Invest – harness the entrepreneurial spirit that sparked us into life to deliver new, innovative and practical solutions for our investees. Sometimes we’re too eager to hold out our helping hand and we find it gets burnt. Saying no to a well-intentioned organisation is never easy, but ensuring sustainability is essential to our long-term survival.  

But I hope nearly 20 years down the line, we’re striking that balance better than ever. We take pride in treating our investees as a life-cycle responsibility, moving organisations through early-stage venturing to mature, mainstream ‘finance ready’ organisations. We’ve diversified our business model and funding sources, reducing risk and attracting commercial investment. And we’ve built a track record as a leading performer in blended finance creation and deployment. 

Saying no to a well-intentioned organisation is never easy, but ensuring sustainability is essential to our long-term survival

What has Big Issue Invest done with £100m? We’ve turned it into more than £500m in revenues per year for more than 600 social enterprises we’ve invested in, who have collectively employed more than 16,000 people. Vital organisations that have impacted the lives of more than 6m people by delivering essential services like housing, helping individuals find employment, education and training, mental health care, and community spaces. 

With turbulent times comes opportunity. Opportunity for social investment to step into the gaps left by the absence of public funding and for our sector’s potential to finally be recognised. That’s my vision for the next 20 years of Big Issue investments; for the next £100m we invest. 

Header image: Handcrafted was awarded £300,000 from the Flexible Social Finance Fund launched by The North East Combined Authority and managed by Big Issue Invest. Alongside £200,000 from Key Fund, this allowed Handcrafted to develop its supported housing for care-experienced young people. It also runs four training and support centres where people receive training and development support as well as access to accommodation.