Taking social impact investment to the next level

Published

Written by

Stephen Muers, Chief Executive Officer

As we return from our summer holidays, and also begin our long-awaited return to the office, we do so with fresh enthusiasm as we enter our next strategy cycle. Today, I can announce our new and exciting plans to grow the social impact investment market and improve more people’s lives in the UK.

All over the UK, people face daily challenges to their lives, many of which have been made worse by the pandemic. As we approach ten years since we were established, we have looked at what more we can do to grow the contribution that social impact investment can make to improving people’s lives.

Over the last decade, we have learned what works when ideas, expertise and investment are united. By working together with our partners, we have been able to create funds, bring other investors alongside our capital, and have made more than £2 billion of investment capital available to social enterprises and charities. It’s the hard work and dedication of these enterprises that helps people to create positive change.

Creating impact

We have begun to gain real traction, with growth in different areas of the market that goes hand-in-hand with reaching more people. The social property market was in its infancy ten years ago and now it is worth more than £2 billion. We have supported over 190 technology startups, which in turn have supported more than 17 million people through innovative technology in areas such as financial inclusion and health and wellbeing. Our partners are providing secured and unsecured debt, as well as blended finance, to a wide range of organisations, many of which are supporting people in some of the most disadvantaged areas of the country. And through outcomes partnerships, public services are better meeting the needs of vulnerable people with multiple and complex needs. Greater scale, greater impact, and more people’s lives improved.

Social impact investment has come a long way in the last decade. It is no longer a niche sector; it is part of a global movement. There is a diverse range of investors, from the mainstream and commercial to the public sector, all moving into impact. As a result, the market has grown to over £5 billion in the UK alone. We see real momentum building and are determined to see this translate into more positive impact on people’s lives across the UK.

Planning for the next five years

We are an ambitious organisation and want to help take the market to the next level. Our goal is for social impact investment in the UK to be worth between £10 to £15 billion by 2025. Our approach in that time will be to focus on scaling up what works, creating even greater social change through investment and reaching more organisations in different places and communities in the UK, including those who have missed out in the past. We will work with partners, developing tools, products and platforms that can channel our capital and that of other investors alongside us. And we will create more opportunities for others to invest in social impact.

We will do this by helping to build an investment ecosystem that supports enterprises to improve people’s lives. We will focus on four key strategic priorities where we believe we can make the biggest difference. By bringing in more capital alongside ours in venture, lending, outcomes contracts and property, there is real opportunity to help enterprises scale their impact, support new social entrepreneurs and to give investors a sustainable financial return. We are already seeing these types of investment creating change at meaningful scale in issues including homelessness, healthcare and financial inclusion

Alongside these key areas, we will continue our work with partners in innovation to find the new ideas. We will also build on our experience and expertise in launching the Schroder BSC Social Impact Trust to co-create more scalable options that create impact and grow the market.

My reflections

I am personally very excited by the opportunity we have, and the scale of that opportunity. I’ve been at Big Society Capital for five years, and we are in a very different place now than when I joined in terms of the range of partners that we can work with and what we can achieve. In the last year, we have worked more widely across different areas of government than ever before, there are more organisations in the philanthropic world that are using their endowments in different ways and more commercial investors are bringing their capital to create impact. Many more social enterprises and charities are showing what can be done, having blazed the trail for social impact investment. They are showing the transformational difference that can be achieved.

The momentum from our stakeholders, and us, is bigger than anything we have had before. That is a very exciting prospect indeed.

Join us

Our new strategy is an evolution, informed by everything we have learned over the last decade. None of this would have been possible without the investors we work with, nor the fund managers, social enterprises and charities who create the social impact. And we can’t achieve our goals without continuing to work in partnership.

We are confident in our plans, ambitious for the future, and have the resource and appetite to make this happen. To find out how we can work together, visit our website to find out more and join our webinar at 2pm on Thursday 30 September.

I look forward to seeing you there.