Big Issue Invest Outcomes Investment Fund | Big Society Capital

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Big Issue Invest Outcomes Investment Fund

Specialist fund providing flexible, risk taking finance to charities & social enterprises delivering improved social outcomes through payment-by-results contracts.

Social impact 

Well-designed outcomes-based contracts can be powerful tools for focusing resources on unlocking improved social outcomes for people with complex needs.

Big Society Capital and Big Issue Invest are excited to partner on the Big Issue Invest Outcomes Investment Fund to support charities & social enterprises by investing the capital required to support their delivery of these outcomes-based contracts.

The hope is that through the use of such tools, we will be able to create a significant social impact across a range of outcome areas by funding programmes and services that help to reduce or avoid negative life outcomes that afflict many of our most vulnerable communities.

 

Financial rationale 

The Outcomes Investment Fund will invest between £250,000 and £2 million to support organisations delivering Payment-by-Results contracts. This may be directly into charities or social enterprises, or through special purpose vehicles formed to hold these contracts (often called “Social Impact Bonds”).

The fund is working with charities and social enterprises to provide investments that match the cashflow profile of the outcome-based contracts being delivered against whilst sharing some or all of the performance risk.

 

Market development

Big Issue Invest is a social investment fund manager which has invested over £30 million in over 300 charities and social enterprises across the UK to date through a variety of investment forms. This has included the funding of outcomes-based contracts and providing management support to social enterprises delivering high-impact services working with young people who are not in education, employment or training (NEET), people who are homeless or at risk of homelessness and people affected by severe mental illness.

The increasing use of payment-by-results by central and local commissioners has created more opportunities than ever for charities and social enterprises to deliver clearly evidenced preventative interventions that create significant improvements in social outcomes for their beneficiaries.

Big Issue Invest was selected to manage a £10 million cornerstone investment into its Outcomes Investment Fund by Big Society Capital. The Outcomes Investment Fund will allow Big Issue Invest to expand its investments support social enterprises and charities to deliver payment-by-result contracts and grow their social impact.

The Outcomes Investment Fund will continue to fundraise over the coming year and is structured to take in investment from institutional investors as well as qualified private individuals who may additionally benefit from Social Investment Tax Relief (SITR).

This fund will complement our 2013 investment into the Bridges Social Impact Bond Fund, as well as our other investments into funds such as the Care & Wellbeing Fund, managed by Social Finance, and the Social Enterprise Investment Fund II, also managed by Big Issue Invest.

 

Investment details

  • Fund size: £10 million (with further co-investment to be raised)
  • Big Society Capital investment: £10 million
  • Co-investors: Currently under negotiation
  • Arranger/Manager: Big Issue Invest

 

Last updated | 
18 July 2017