Social Impact Venture Capital Trust

Report
1
INTRODUCTION TO OUR SOCIAL IMPACT
BOND WORK
NOVEMBER 2012
Jane Newman, International Director
[email protected]
Emily Bolton, Director
[email protected]
2
SOCIAL FINANCE IS
PASSIONATE ABOUT
IDENTIFYING NEW
WAYS OF TACKLING
ENTRENCHED SOCIAL
ISSUES –
IN SUSTAINABLE AND
SCALABLE WAYS
©Social Finance 2012
WHAT DO WE DO?
Develop deep
understanding
of key social
issues
Identify
effective
interventions;
analyse where
the costs of
failure rest
3
Develop new
revenue
models which
reward
effective
social action
Build investor
confidence in
the financial
and social
value of these
models
Work hard to
make the
models
deliver in
practice
Build and
share
evidence of
what works
IN ORDER TO
Change the way government
seeks to tackle problems
Help build and support growth of
strong, effective social enterprises
AND THEREBY DELIVER SOCIAL
©Social Finance 2012
Expand the range of investors able
to participate in social investment
CHANGE
OUR ROLE IN THE MARKET
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SOCIAL FINANCE DESIGNS FINANCIAL STRUCTURES THAT ENABLE MORE CAPITAL
TO REACH THE SOCIAL SECTOR
Investors
Government
Social
Finance
Social Service Providers
Research &
Development
Financial Structuring
Capital Raising
Key social issues
Supporting Effective
Organisations
©Social Finance 2012
Social Investor
Market Growth
Long-term Social
Change
THE STARTING POINT: CONSISTENT UNDER-INVESTMENT IN
PREVENTION
Higher level
of spending
on crisis
interventions
Poorer social
outcomes,
more require
crisis
interventions
Fewer
resources
available for
early
interventions
CAN THE LONG TERM SAVINGS FROM AVERTING POOR OUTCOMES BE USED TO
INVEST IN PREVENTATIVE SERVICES?
©Social Finance 2012
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SOCIAL IMPACT BONDS CAN UNLOCK THIS
SOCIAL
IMPACT
BONDS
Money to
invest in earlier
interventions
More early
interventions
Lower spending on
crisis interventions
Better
outcomes; fewer
individuals
requiring crisis
interventions
SOCIAL IMPACT BONDS CATALYSE POSITIVE CYCLES OF GOVERNMENT SPENDING, IMPROVING
SOCIAL OUTCOMES AND REDUCING COSTS
©Social Finance 2012
6
FUNDING REHABILITATION AT PETERBOROUGH PRISON
7
INVESTORS
£5 million Return depends
on success
SOCIAL IMPACT PARTNERSHIP
Payment
based on
reduced
convictions
MINISTRY OF
JUSTICE/
BIG LOTTERY
FUND
Reduction in
re-offending
St.
Giles Trust
St Giles Trust
Ormiston Trust
SOVA
Other
Interventions
Other Interventions
Support in prison,
at the prison gates
and in the
community
Support to
prisoners’ families
while they are in
prison and post
release
Providing volunteer
support post intensive
phase or with lower
risk/need clients pre and
post release
Support needed by the
prisoner, in prison and the
community. Funded as the
need is identified eg. Lower
level mental health support
3,000 male prisoners sentenced to less than 12 months
©Social Finance 2012
RECENT PROGRESS
Young people in or on the edge of care
• Announced 23 November 2012: Awarded contract by Essex County Council to deliver and
finance multi-systemic-therapy to over 380 adolescents on edge of care system in Essex over next
8 years – outcomes financed by savings from reduction in care placements
• Advising Manchester City Council on options to raise social investment to fund multi-dimensional
foster care working with vulnerable adolescents
Improving education and employment prospects for young people
• Announced 31 October 2012: Awarded two contracts by Department of Work and Pensions to
work with specific groups of 14-16 year olds with outcome payments made at agreed milestones
Prisoner rehabilitation
• Advising two consortia on bids to participate in £20 million of outcomes payments pledged by the
Ministry of Justice
Homelessness
• Announced 23 November 2012: Advising Greater London Authority on procuring interventions
to address rough sleeping financed by £5 million outcomes budget
A RECENT NCVO REPORT IDENTIFIED 28 ACTIVE PAYMENT BY RESULTS INITIATIVES
ACROSS UK PUBLIC SECTOR
©Social Finance 2012
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INTERNATIONAL CONTEXT
9
International interest has surged in the past two years
Scotland
Canada
•
Manifesto
commitment from
new government
•
Exploring
applications in
criminal justice and
worklessness
•
Manifesto commitment
from new government
•
Spending review outlined
plans for at least two areas
Germany
•
•
Bertelsmann Stiftung
Social Venture Fund
US
•
Separate sister organisation
launched
•
Massachusetts started
procuring two SIBs in youth
justice and homelessness
•
Connecticut, New York State
and Minnesota developing SIB
projects
•
NYC and Goldman Sachs
announced a Social Impact
Bond in August 2012 for
rehabilitation of offenders
from Rikers Island
©Social Finance 2012
Israel
Ireland
•
•
Manifesto
commitment from
new government
Presently exploring
five areas
•
Government
interest
•
Plan emerging
around
employment for
ultra orthodox
communities
Australia
•
New South Wales has announced
three co-development partners for
applications around reoffending
and out of home care
•
•
Federal government interest
Emerging intermediaries/large
NGOs
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SOCIAL IMPACT
BONDS ARE NOT A
UNIVERSAL SOLUTION
– THERE ARE KEY
INGREDIENTS
©Social Finance 2012
WHAT IS REQUIRED FOR A SIB?
Robust outcome metric
Cost of intervention is
small relative to potential
public sector value
Clearly defined target
group
Evidence-based
interventions
Issue area a priority for
public sector
©Social Finance 2012
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Measurable attribution
Issue area a priority for
investors
12
BUILDING THE
INVESTOR BASE
©Social Finance 2012
ENGAGING WITH KEY POOLS OF INVESTOR CAPITAL
MEDIUM TERM FOCUS
NEAR TERM FOCUS
HIGH NET
WORTH
INDIVIDUALS
TRUSTS AND
FOUNDATIONS
£70bn assets in UK
MASS
AFFLUENT
ISAs £92bn
INSTITUTIONS
Family
Offices
Private Banks
Global Social Impact
Fund of Funds
Venture Capital Trust
Enterprise Investment Scheme as a
wrapper for SIBs
©Social Finance 2012
Could philanthropy
be an asset, not an
expense in their
balance sheets?
IFA
STRUCTURED FUNDS
Investor Advisory
Services
CORPORATES
£488 bn
Early signs of Local
Authority Pension
Funds interest.
Fund
Managers
13
BIG SOCIETY CAPITAL SEEDED FUNDS
The Results
Fund
Impact Ventures UK Fund
Nesta Impact Investment Fund
Investors
Intermediaries
14
APPENDIX
©Social Finance 2012
NEW PRODUCTS
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Global Social Impact Fund
Social Impact Venture Capital Trust
• $250m institutional quality fund of funds
• London listed regulated product supported
focusing on 15-20 private equity and debt
funds across Africa, LatAm and SE Asia.
• Five key sectors: financial inclusion,
agriculture, healthcare, micro-cap SME and
community based energy.
• Working with fund management team with
over fifty years combined experience.
• Targeted at family offices and private banks
across the globe.
©Social Finance 2012
by a strong independent board which IFAs
comfortable to promote.
• Offers mass affluent investors a tax
enhanced return on a portfolio of
investments in social enterprises working
with disadvantaged groups, improving
community cohesion, providing better health
and social care and ethical consumerism.
• Targeted for completion in 2012/13 tax
year.
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THANK YOU!
©Social Finance 2012

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