FIRST STEPS IN ACCESSING SOCIAL INVESTMENT Social Enterprise North West Salford – 27 February 2014 Dan Hird Head of Corporate Finance Triodos Bank

1 First steps - evaluation - is a blended social and financial return achievable? - identify business case and finance requirement Investment readiness – what does this entail? - business planning and financial modelling - advice on governance – contracts, management etc - plan deal structure and type of finance? - data-room - produce financial promotional material - marketing plan First Steps in accessing social investment Investment readiness

2 Investment & Contract Readiness Fund (ICRF) - £10m fund administered by SIB on behalf of Cabinet Office - provides access to a list of accredited intermediaries - aimed at SEs looking to raise at least £0.5m of social investment - grants of £50k - £150k available Other forms of investment readiness support - Big Lottery Fund – Social Incubator Fund & others First steps in accessing social investment Investment readiness – financing support

3 Social investors – a definition? - motivated by a blended social and financial return Social investors – who are they? - institutions – charitable foundations, family offices and trusts, social investment funds - intermediaries – private banks, IFAs, wealth managers - retail – HNW investors and members of the public - potential new investors – housing associations, LA pension schemes, corporates, University endowment funds Social investment - a developing market and a new asset class BSC, SIBs, SITR, public sector reform, charity bonds First steps in accessing social investment Accessing social investors

4 Principal features - introduction – April 2014 (subject to Royal Assent in July 2014) - offers 30% up front income tax relief against an eligible social investment - eligibility – unsecured investment (can be in the form of debt (bonds) or equity) - eligibility – charities, CICs and CBCs – with less than 250 employees - intended to work in a similar way to existing tax reliefs such as EIS, SEIS and VCTs State Aid rules - initial relief limited to around £200,000 per issuer - Government is applying to EU for increase in relief (aim £5m by 2016?) What effect could SITR have on the social investment market? First steps in accessing social investment Social Investment Tax Relief (SITR)

5 Dan Hird Head of Corporate Finance Triodos Contact details