THE UK APPROACH TO GROWING A SOCIAL INVESTMENT MARKET Sarah Hickey, Social Investment & Finance Team Cabinet Office, UK JULY 2014 UNCLASSIFIED November 18

#SOCINV The UK Government works with partners to grow a private market increasing social impact Why What How

Opportunity Barrier Solution #SOCINV Social impact investment brings together innovative enterprise with investors who want to do more with their capital Opportunity Barrier Solution

#SOCINV Social enterprises are businesses with a social mission They gain income from trade They channel profits towards a good cause for example GLL November 18 DRAFT VERSION UNCLASSIFIED

Government saw that it could help a new market to grow further, faster #SOCINV Government saw that it could help a new market to grow further, faster 2000-2010 2010 2010-2014 In doing this, they support both growth and social innovation growth; tax and jobs social innovation: entrepreneurial solutions to intractable social issues E.g. blue sky regeneration November 18 DRAFT VERSION UNCLASSIFIED

#SOCINV However, this sector struggles to access finance to scale x% said this was the biggest barrier, compared with X% of mainstream SMEs because of information asymmetries on both sides for example bank said it took four times as long to process a deal from a charity borrower November 18 DRAFT VERSION UNCLASSIFIED

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#SOCINV The social investment team works with partners to support supply, demand, and an enabling environment DEMAND SUPPLY ENVIRONMENT

Growing supply means increasing and diversifying the investor base #SOCINV Growing supply means increasing and diversifying the investor base Big Society Capital Design principles Results Social investment invests money on the basis of both social and financial return Rather than giving money away through philanthropy Or lending purely on the basis of commercial returns Social investment about doing both – achieving sustainable social impact November 18 DRAFT VERSION UNCLASSIFIED

#SOCINV Growing amount of deals November 18 DRAFT VERSION UNCLASSIFIED

Growing demand means enabling enterprises to become investable #SOCINV Growing demand means enabling enterprises to become investable Investment Readiness Design principles Results

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Legislation Design principles Results #SOCINV Creating an enabling environment means making it easier for investors and enterprises to come together Legislation Design principles Results

30% social investment tax relief #SOCINV Social Value Act Social Value Act 30% social investment tax relief November 18 DRAFT VERSION

Market building has led to growth. #SOCINV Market building has led to growth. Now we’re thinking about how to mainstream Crowd funding Global market Development finance November 18 DRAFT VERSION

#SOCINV Thank you UNCLASSIFIED