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Bank of America and Access back potential £25m Growth Impact Fund

14 Apr 2022 News

A new social investment fund potentially worth £25m will offer flexible capital for social businesses, with half the fund ringfenced for leaders from underrepresented backgrounds. 

The Growth Impact Fund will launch later this year and has been developed by UnLtd, Big Issue Invest and Shift to tackle barriers to accessing the social investment market, which were highlighted by the Adebowale Commission on Social Investment. 

Only professional investors are allowed to support the fund, which so far has the backing of Bank of America and Access – the Foundation for Social Investment. 

Organisers were not able to give a breakdown of how much each investor had committed, and said they were hoping to reach £25m, but will first close at a smaller amount. 

Funding will be aimed at social entrepreneurs and founding teams, with wraparound support. 

The Growth Impact Fund will invest in 50-60 ventures, focusing on diverse-led social enterprises tackling inequality in the UK. 

There will be grant funding social entrepreneurs who face barriers to access to start their investment journey. Organisers suggest that this could be used to fund, childcare, transport, marketing support or other associated costs.

Social entrepreneurs will be represented across the advisory board and investment committee, to “hold the fund to account in being fit for purpose, inclusive, accessible, and meeting the needs of diverse founding teams,” the announcement said. 

‘Committed to tackling inequality’ 

This January the Adebowale Commission on Social Investment concluded that the market needed structural reform. 

Mathu Jeyaloganathan, head of investment at UnLtd, said: “The Adebowale report highlighted that the social investment sector has not done enough to prioritise the needs of social enterprises, and in particular that it has serious problems with race. This fund was created to address that. 

“As passionate as we at UnLtd are about change, it won’t be possible without the help of like-minded investors and partners, so we are absolutely delighted that both Bank of America and Access have come on board to make social investment work better for social entrepreneurs.”

More details will be announced later this year and the investors said they were committed to tackling inequality. 

Bernard Mensah, president of international at Bank of America, said: “We hope to catalyse and unlock finance for social entrepreneurs where it is most desperately needed. We are committed to helping tackle social inequality today and the building of sustainable solutions for the next generation and beyond.”

Access launched a Flexible Finance for the Recovery last year as part of a plan to encourage innovation. 

Seb Elsworth, chief executive of Access, said: “A core motivation for this was to ensure a flow of capital to parts of the market that are underserved, often minoritised groups and communities that have too often been excluded by previous investment programmes. 

“The Growth Impact Fund tackles both of these elements head-on in an extremely bold and targeted way, and Access is delighted to provide early financial backing to enable other investors to come on board.”

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