Big social investment fund targets family offices

UK publisher and social enterprise group Big Issue will seek family office investors to help it reach its £250 million (€287 million) target for an ambitious new social investment fund, which could potentially dominate the UK sector.

Announced this week, the new Big Issue Invest Fund Management division will launch a series of funds designed to offer financial returns for investors, and social returns for the enterprises and organisations it invests in.

Big Issue Invest chairman Nigel Kershaw said he expected a reasonable annual rate of return on investments, but could not reveal further details at this stage.

Big Issue, established in 1991 by the social entrepreneur John Bird and Gordon Roddick, the husband of the founder of cosmetics company The Body Shop, provides the UK’s homeless a hand up out of poverty by allowing them to sell its weekly magazine The Big Issue and keep a share of the money raised from sales.

The new fund will be part of Big Issue Invest – the group’s social investment intermediary.

Big Issue Invest provides early stage finance, loans and capital growth finance, up to the value of £1 million, for charities and social enterprises including Jamie Oliver’s Fifteen restaurants, War Child and Turning Point.

The planned fund will potentially comprise a hefty part of the UK’s social investment market – which, according to philanthropy think tank and consultancy NPC, is currently valued at £200 million, but expected to reach £1 billion by 2016.

It aims to raise its quarter million pound target in the next five years, and is seeking investment from family offices, foundations, institutions and individuals.

Iona Joy, head of charity effectiveness at NPC, said the new project was on a scale “never seen before” and said it would be suitable for investors who wanted a route into the social investment market.

“Managed funds have potential to be a significant area of growth in the social investment world, popular with retail investors as it’s much easier than trying to make direct investments,” said Joy.

Big Issue is currently on the look out for a chief executive to manage the investment fund, which will employ a team of around 15 staff.