Nick O'Donohoe says the bank plans to use the £600m it was endowed with to raise £2bn to £3bn from other investors
Big Society Capital plans to generate about £3bn in funds for social investment over the next five years by working with other investors, according to Nick O’Donohoe, its chief executive.
Speaking yesterday at an event in London run by the consultancy Action Planning, O’Donohoe said the bank hoped to use the £600m it was endowed with to raise £2bn to £3bn from other investors via intermediary lenders over the next three to five years.
Big Society Capital passes its funds to intermediary lenders that can use the money to raise additional funds from other investors and then provide loans and other investments to charities and social enterprises.
"The idea is that you give intermediaries £1 and they raise another £3," he said. "Ideally, over the next three to five years we will see a market of at least £2bn or £3bn develop."
He said Big Society Capital would like to increase the number of intermediaries with which it works.
"Our aspiration a year from now is to have six to eight different organisations providing that kind of finance with a larger amount of money than those organisations have today," he said.
O'Donohoe told Third Sector that discussions were going on with several interested parties, including financial institutions and foundations, and he was confident of attracting the desired number of intermediaries.
Big Society Capital was set up with a £600m endowment consisting of £400m from dormant bank accounts and a £200m contribution from the high-street banks Barclays, HSBC, Lloyds Banking Group and RBS.
Meanwhile, another speaker told the conference that the Department of Health might reopen its Social Enterprise Investment Fund, which helped social enterprises providing healthcare and social services but closed in September.
Jonathan Jenkins, chief executive of the Social Investment Business, which managed the fund on behalf of the government, said: "The rumour is that the Department of Health may be looking at continuing this fund. There might be something in the next couple of weeks."
The £100m fund, which helped social enterprises to buy land, vehicles, buildings and equipment to provide health and social care services in England, provided grants of between £50,000 and £150,000, and loans and performance-based products of £50,000 to £1m.