First fund manager registered for new European social entrepreneurship regime

Germany-based social investor BonVenture has become the first registered manager of European Social Entrepreneurship Funds (EuSEF), the new regime to facilitate EU-wide investment in social ventures.

BonVenture Management GmbH, which is based in Munich and which markets its funds in Germany, Switzerland and Austria, has been registered by German regulator BaFin, according to the EU-level European Securities and Markets Authority (ESMA).

BonVenture, headed by Managing Director Erwin Stahl, supports social purpose companies and organizations at the start-up, early or expansion stage via equity investment, mezzanine financing or loans. It focuses on marginalized groups, employment and education, and children, young people and the elderly. It also looks at green technology and environmental protection.

It says its goal is “to tackle social, societal and ecological problems” and to “set an example for social investments by combining philanthropy and economic efficiency” – by applying proven venture capital methods to the social sector.The EuSEF label, which came in last July, aims to enable investors to easily identify funds that focus on investing in social businesses. To get the label, a fund has to prove that at least 70% of its capital is allocated this way.

Under the regime, the funds have to publish information about the kinds of social businesses they target, the ways they are selected, the ways the fund will help the social businesses, and how social impacts will be monitored and reported.

The related European Venture Capital Fund Managers (EuVECA) rules will do the same for small and medium-sized enterprises. There are currently three EuVECA managers registered: Denmark’s NCP–IVS III GP ApS, Amadeus Capital of the UK and Chrysalix Set Management of the Netherlands.

It’s been proposed that both vehicles could be investments for the planned European Long-Term Investment Fund (ELTIF) offering.