- How do we gather our data for market sizing?
In 2016, we produced our first comprehensive estimate of the size and composition of social impact investment in the UK to take stock of progress. In each subsequent year, we have updated the central data in this report. We continue to produce these estimates in developing social impact investment, and to illustrate how it is being used as a tool for social enterprises and charities.
We use publicly available sources where possible and collate two measures of market size (outstanding investment and deal flow), and break these down by product area. We classify social impact investment as where both investors and investees have displayed social intent. We have tried to retain a similar methodology over time, so we can be confident this gives a relatively good estimate of market growth.
We will continue to update this estimate annually and strive to make advances in our use of data and transparency. We’d like to remind you that this is our best effort estimate. We welcome your input and thank all the investors who have provided their data to enable this update.
- What is the definition of market size?
Market size is the outstanding value of social impact investments (i.e. balance sheet amount). It is the value of capital out (drawn down), less capital back in (repaid) plus/minus valuation adjustments (e.g. Property Value write-ups / Loan write offs).
- What is the definition of deal flow?
Deal flow is the amount of money committed to an investment deal, but not necessarily drawn down/utilised within the year.
- Can you give an example of how this works in practice?
Fund X committed £100,000 to Charity A in 2019. Charity A only drew down £50,000 of this commitment. At the end of the year, Fund X values the £50,000 drawn down as £45,000 (they believe there’s been a write down in the value of the invested capital in the frontline). The value of the outstanding investment/market size for Fund X would be £45,000 (and not the £100,000 committed, or £50,000 drawn). And the deal flow would be the £100,000 committed.
- How much of the £6.4 billion roughly can Big Society Capital claim to have influenced?
The total capital drawn down from Big Society Capital and other investors is £1.7 billion.
At Big Society Capital, our aim is to promote the development of the social impact investment market in the UK. We help develop other sources of capital, encourage replication and influence policy to help ideas succeed beyond Big Society Capital’s investment.
- What is the breakdown of investee types?
The social impact investment market includes investments into both asset-locked and non-asset-locked social enterprises and charities, as well as investments into 'assets' such as property and renewable (energy) projects. The criterion for inclusion is where both the investor and user/investee explicitly have social intent.
- What is the breakdown of types of investment? (ie charity bonds, bank lending, etc)
- 45% market size
- 52% deal flow
- 32% market size
- 28% deal flow
- 6% market size
- 9% deal flow
- 6% market size
- 5% deal flow
- 10% market size
- 5% deal flow
Social outcomes contracts
- 1% deal flow
- 1% market size