Big Society Capital will work with mainstream financial institutions over the coming year to see how they can better support social investment, the social lender has said in its first annual report.
Nick O’Donohoe, chief executive of BSC, which by the end of 2012 had committed £56m to 20 intermediaries, says in the report that it will aim to commit between £75m and £100m to up to 20 new investments over the coming year.
"We will encourage the development and distribution of new social investment products to new types of investors, with a particular focus on helping a broader range of smaller investors to access the social investment market," he says. "We will seek to partner with mainstream financial institutions to encourage them to explore how they can better engage with social investment."
A spokesman for BSC said it could not give many further details on which institutions these would be. But in a blog about the report's launch, O’Donohoe said it would be working with the Northern Rock Foundation "to capitalise a fund that will invest in social investment finance intermediaries serving north-east England".
O’Donohoe said BSC hoped to follow this with the announcement of other regional funds in the future.
In the blog, he wrote that BSC was working with major grant-makers to improve finance for community asset development. "Specifically, we will examine the potential for a significant financing facility that would empower communities to take valuable assets all the way from feasibility-testing to final development," he said. "We hope to report on progress by the late summer."
O’Donohoe said that after the launch of the "world’s first" social impact bond fund, managed by Bridges Ventures with BSC investment, it saw a need for a second outcomes finance fund, which would support innovative approaches to complex social problems. "BSC will soon call for fund manager proposals and offer a cornerstone investment," he said.
The annual report says that BSC is aware of the need to ensure that social organisations can access loans, particularly loans that are unsecured by assets, and that it will provide capital to social lending intermediaries to enable this.BSC also outlines its ongoing support for a pilot that is testing an investment index for the social investment market. The pilot index, EngagedX, was launched by Engaged Investment in December 2012 and will bring together the financial and social data that investors need to assess this market and decide whether to invest in it. "Developing this index will be important in increasing confidence in the social investment market," the report says.