Access: the Foundation for Social Investment has announced it will put its whole £60m endowment from the Cabinet Office into investments intended to create social return.
Last year, the Cabinet Office committed £60m to the Foundation, to allow it to give grants to help charities engage with the social investment market over a ten year period. To date, Access has received £43m of that money and will receive the remainder over the coming years.
That money will be given out over the next few years, meaning that Access needs to preserve the value of its capital in the short term, and must invest in products with low volatility.
Access has decided to invest the endowment as part of the Foundation’s goal of achieving “total impact” – the joint action of grant giving and reinvestment of its endowment to generate social return.
It will use a “bull’s eye model” which aims to invest first in social impact products aimed at charities and social enterprises in the UK, followed by charities and social enterprises overseas, followed by other organisations delivering social impact and lastly organisations with best-in-class environmental, social and corporate governance (ESG) indicators.
Some money will also be held in cash.
Janie Oliver, finance and operations manager at Access said the Foundation’s priority is to “invest as much of our endowment as possible into charities and social enterprises delivering impact and operating in the UK”.
“Where this isn’t possible then we will look to organisations creating social impact in other countries, and finally to companies offering leading ethical, social or governance practices,” she said.
Access said it had selected Rathbones to run its endowment following a “competitive process” involving eight other asset managers. It will invest the funds in social and ethical fixed income investments such as charity bonds and ethical bonds, the Foundation said.
Bryn Jones, head of fixed income at Rathbones, said: “Over many years, we have shown that it is possible to produce attractive economic returns, while supporting bond issuers with strong environmental, social and corporate governance values. We continue to show that investors do not need to give up a social return for an investment one, and vice versa.”
Access will make grants over a ten year period, funding programmes that support charities to access social investment. Its first two programmes, the Reach Fund and Impact Management programme, will launch in the autumn.