UK’s first social impact bond fund achieves final close of £25m
Bridges Ventures (“Bridges”), the specialist fund manager dedicated to sustainable and impact investment, has announced the successful final close of the Bridges Social Impact Bond Fund. The £25m, first of its kind fund provides investment and support for early intervention social care programmes in areas such as education, employment, housing and care for vulnerable young people.
The Fund provides much needed up-front capital for projects commissioned by the public sector on a payment-by-results basis (PbR) where investors only receive returns if specific social improvement outcomes are achieved. This model means that commissioners pay only for outcomes that will improve the lives of beneficiaries, rather than bearing the costs of services which may or may not deliver social outcomes.
The Fund, which reached first close at £14m in April 2013, was oversubscribed for its £25m final close. New investors include the European Investment Fund, Great Manchester Pension Fund, Merseyside Pension Fund, Deutsche Bank, The Prince of Wales’s Charitable Foundation, Trust for London and The Highwood Foundation. The close highlights the increasing demand both from committed social investors and new investors who believe that Social Impact Bonds (SIBs) can provide social service providers with the funds for early interventions to deliver social outcomes.
The Fund targets, for example, early intervention schemes that aim to address the root causes of social disadvantage. This could include working with vulnerable children to improve educational attainment or providing family therapy to avoid vulnerable adolescents being taken into local authority care.
The Fund has already invested in two early intervention schemes in the UK. The first, ‘It’s All About Me” (IAAM), is a programme developed by eighteen voluntary adoption agencies that will support local authorities’ adoption services by finding, training and supporting families to adopt children who are recognised as harder-to-place, and who otherwise would probably remain in care. The second, commissioned by Manchester City Council and run by Action for Children is the first SIB to fund multi-dimensional treatment foster care (MTFC) placements, helping young people with challenging emotional and behavioural difficulties move back into family settings.
The team working on the fund at Bridges has extensive experience working with SIBs and is invested in over half of all those currently operational in the UK. Bridges adopts a hands on investment style providing both funding and advice on the delivery of programmes. This approach ensures the best possible social outcomes are achieved by projects, thereby securing investor returns.
Antony Ross, Partner and Head of Social Sector Funds at Bridges Ventures, said: “Early intervention schemes seek to target the root causes of social disadvantage at a fraction of the cost of dealing with the after-effects on society and the economy. Through the Fund we aim to support early intervention in the UK, bringing both much needed financial support and Bridges’ extensive operational expertise to schemes across the country.
“By using SIBs to fund early intervention, society benefits on several levels: commissioners save money by paying only for outcomes that improve the lives of beneficiaries; social outcomes are improved; and the total bill on society is reduced. With all the advantages we are seeing increasing levels of demand for SIBs from the Government commissioners, charities and social organisations, and, encouragingly, investors.”
“We are delighted that the growing track-record of improved social outcomes delivered by SIBs has attracted new socially aware investors alongside committed social investors to our fund.”
Notes to Editors
About Bridges Social Impact Bond Fund
The Bridges Social Impact Bond fund was launched in April 2013 with Big Society Capital as cornerstone investor, alongside Omidyar Network and Panaphur, and a co-investment agreement with the Bridges Social Entrepreneurs Fund. The fund provides investment and support to charities and social enterprises delivering intervention programmes which significantly improve social outcomes. Find out more about the Bridges Social Impact Bond Fund here.
About Bridges Ventures
Bridges Ventures LLP (“Bridges Ventures”) is a specialist fund manager dedicated to using an impact-driven investment approach to create superior returns for both investors and society at-large. Bridges Ventures has raised eight funds to date which total almost £500m: Sustainable Growth Funds I, II and III; the Bridges Sustainable Property Fund; the CarePlaces Fund; the Bridges Property Alternatives Fund; the Bridges Social Entrepreneurs Fund and the Bridges Social Impact Bond Fund.
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