Interview: Jonathan Jenkins

The new chief executive of Social Investment Business tells David Ainsworth he used to be an 'arch-capitalist' but is now dedicated to giving loans and business support to third sector organisations

Jonathan Jenkins
Jonathan Jenkins

Jonathan Jenkins, the new chief executive of the Social Investment Business, has taken over at a time when it is in the midst of change. Until last year, its largest contract was to run the £215m Futurebuilders grant and loan fund on behalf of the Cabinet Office. But the coalition government has decided that Futurebuilders' funds, when repaid, will be channelled back into government coffers rather than left with the organisation to lend again.

So the business has been forced to scale down, even though it still has £260m of government funds under management, of which £144m is in the form of loans. For Jenkins, it is clear that the era of primarily lending government money is over, and although he says the SIB might still apply to run new government loan funds, he believes its main source of capital will be elsewhere. He is on the hunt for more cash to lend.

Jenkins used to be a foreign exchange trader and describes himself as a "former arch-capitalist" who converted to investment with a social conscience and entered the sector in 2008 as director of ventures at the social enterprise support body UnLtd.

He took over from Jonathan Lewis at the SIB in September, and describes the organisation as a "sleeping giant". He points out that it still has more funds under management than any other outfit in the social investment sector. "But it's time to look at where we can get some new money," he says.

He already has ideas about where else to go to raise that cash. And although he is hesitant to say exactly whom he will approach, one source will certainly be the newly formed wholesale lender, Big Society Capital.

"Everyone in this market is talking to Big Society Capital," he says. "But if we take its cash, it is likely to require us to raise four times as much capital elsewhere."

Jenkins says there is a clear appetite from institutional and individual investors to get more involved in social investment, but work is needed to attract them. This includes the development of funds that are more attractive to those investors and overcoming a language barrier between professional investors and potential investees.

"There's a lot of education to be done on both sides," he says. "You can't just layer commercial sector investment practices onto the third sector. It won't work."

Any new fund he creates, he says, will be different from those provided by other social lenders.

"It's pointless creating a new fund that looks like an existing one that hasn't already got the money out of the door," he says. "We need to do something different."

Whatever he does, he says, will be in collaboration with other social lenders. He says his organisation has ploughed its own furrow for too long, and he is keen for it to work more closely with others.

"It's a fair perception - and before I joined, I had this perception myself - that Futurebuilders and the SIB were off on their own doing their own thing," he says. "I'm keen for us to share our learning and become better integrated into the wider marketplace."

Even if the source of capital changes, Jenkins expects much of his organisation's modus operandi to remain the same: investment in third sector organisations that want to build capacity, often in order to win public sector contracts.

He says the SIB has been successful at providing loans coupled with a high level of business support, and he believes this will remain the core of what it does. Nevertheless, he is open to other types of investment and is keen to find out more from investees about their needs.

"We really need to look at what we've done and what works," he says. "Whatever works best, we'll do more."

His first impression, he says, is that third sector borrowers prize patience more than low price in their lenders, and that it is vital for a good lender to provide a high level of support.

One thing he feels will take more of a back seat is his organisation's work on consortia. The SIB was a founder of 3SC, the third sector bidding consortium that won prime contracts in several Labour jobs programmes, and first-tier subcontracts under the Work Programme. Earlier this year, its former enterprise director, Ian Charlesworth, announced plans to create seven more 3SCs.

But Jenkins is clear that he wants the SIB to stick to its expertise as a lender. "Our core strength is lending a lot of money to the third sector," he says. "We wouldn't want to start up something that mirrors 3SC. But we're open to working with anyone who comes up with a solution we can contribute to."


2011: Chief executive, Social Investment Business
2008: Director of Ventures, UnLtd
2006: Director, Myhome Services
1997: Managing director, Plus Markets Group
1992: Head of forward foreign exchange, Schroders

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