Big Society Capital reports £1.7bn worth of investments

13 Jun 2019 News

Big Society Capital has backed £1.7bn worth of investments into charities and social enterprises since the organisation’s inception in 2012, according to its new documents.

Its 2018 annual review, published yesterday, says that this money was invested across 85 funds and social banks.

The cumulative £1.7bn total recorded at the end of 2018 represents a big rise from the £1.1bn in the previous year’s report.

This is mainly due to an extra £450m being made available by co-investors, while Big Society Capital made £90m available.

Some £524m of the cumulative total is from Big Society Capital and £1.2bn from the co-investors with whom it has partnered.

Of the £1.7bn made available, £1bn has been drawn down by charities and social enterprises.

The majority of this £1bn, 65 per cent, has been drawn down as capital for social enterprises and charities through funds and social banks.

Some 20 per cent has been spent on charity properties, 6 per cent on management fees for intermediaries and 4 per cent invested in social impact bonds.

Loss made

In 2017, the organisation made its first ever annual net profit, recording a £782,000 surplus.

But in 2018, the organisation recorded a loss of £6.5m, a similar amount to £5.3m loss it recorded in the year to December 2016.

The report says: “The decline in this year’s net profit demonstrates the upward and downward volatility from valuation movements in the social investment portfolio that are likely to continue to be a feature of our performance in future years.

“This is due to the early stage nature of the social investment portfolio and as a result of applying fair value measurement principles. Our long-term aim is to demonstrate financial viability and cover operational and market building costs in order to generate positive financial returns and social impact.”

Plans to develop impact reporting

Cliff Prior, chief executive of Big Society Capital, said: “Throughout 2018, we accelerated our efforts to create change in our three key themes of homes, places, and early action, whilst also developing a strong pipeline of investments.

“As a result, our strategy of focusing on areas where we believe social investment can have the greatest impact began to bear fruit, with initial investments in the theme areas as well as building partnerships, knowledge and opportunities, enabling us to deliver more in 2019.

“We also began work on our impact measurement and management approach, which is aligned with the vision and strategy of key partners.

“We intend to capture the impact on communities, social enterprises and charities, as well as the impact from supporting stakeholders to work together more effectively. Our impact approach will develop as more projects go live in 2019.

Civil Society Media's Charity Finance Week takes place in October and this year the theme is Accounts and Accountability. Find out more about the events taking place. 

 

 

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