New social stock exchange project gets Big Society Capital backing

New UK social investment ‘wholesaler’ announces first investments

A new social stock exchange venture has attracted funding from the UK’s new Big Society Capital as part of 12 initial investment commitments totalling £37m (€45.9m).

Big Society Capital, a £600m social investment wholesaler launched by the government this year, has invested £850,000 in Social Stock Exchange, which it calls a “a key piece of market infrastructure”.
The new exchange, headed up by Pradeep Jethi, former New Product Development Manager at the London Stock Exchange, aims to become the world’s first regulated investment platform and exchange for social businesses globally.
Launched in 2007, it was initially funded by the Rockefeller Foundation; it is anticipated it will launch in the first quarter of next year. It will target high growth companies in the health, educational and environmental markets. The group is currently building its trading platform, a pipeline of companies as well as broker and investor communities.
Meanwhile, Big Society Capital’s CEO, former J.P.Morgan global research chief Nick O’Donohoe, said the body is on target to make investment commitments of around £50m by year-end.

Big Society Capital cited Boston Consulting Group research saying that the social investment market in England could grow six-fold to £1bn by 2016.

In related news, the City of London Corporation, the municipal authority of London’s financial district, will launch its own £20m social investment fund.The other announced investments:

  • Results Fund (£10m)
    – Financing organisations competing for Government payment by results contracts (including via social impact bonds)
  • Impact Ventures UK Fund (£10m)
    – Impact investing fund managed by LGT Venture Philanthropy/Berenberg Bank.
  • Nesta Impact Investment Fund (£8m)
    – Impact investing fund providing early stage capital.
  • Community Land and Finance (£2.5m)
    – Loan fund for rural homes.
  • Licence Fund/Franchising Works (£1m)
    – Loan fund facilitating franchise licences.
  • PURE (£1m)
    – Loan fund for community renewable energy projects.
  • ClearlySo (£1m)
    – ClearlySo provides capital raising services.
  • Social Investment Market CIC (£875,000)
    – Loan to enable assist bonds from charities and social enterprises
  • Community Generation Fund/Finance South East (£750,000)
    – Renewable energy loan.
  • Triodos New Horizons (£450,000)
    – Social Impact Bond to support young people.
  • ThinkForward/Private Equity Foundation (£450,000)
    – Social Impact Bond in Tower Hamlets, London