Bridges Ventures, the social impact-driven fund manager, has launched a new fund to finance social impact bonds.
The vehicle, which counts the UK’s Big Society Capital as a cornerstone investor, will seek to help young Britons by investing £14 million in charities and social enterprises focused on education, housing, employment and social care. It is part of the £56 million investment pledge announced by Big Society upon its launch in April last year.
The fund also counts Bridges’ Social Entrepreneurs Fund, as well as philanthropic investors Omidyar Network and Panahpur, as limited partners.
The move comes as the UK government increasingly moves towards payment-by-result commissioning, whereby social investors provide upfront funding for initiatives delivered by charities and social enterprises – with the knowledge that their returns will only be achieved if their investment yields specific social outcomes. Such programmes have included helping vulnerable children achieve educational targets, as well as assisting their transition from residential care homes.
“The fund will provide charities and social enterprises with a much needed sustainable source of capital and support, allowing them to focus on delivering crucial social outcomes-based programmes that will benefit society as a whole,” commented Antony Ross, partner and head of social sector funds at Bridges Ventures, in a statement.
Bridges, the vehicle created by Apax founder Sir Ronald Cohen, has built experience in supporting social enterprises responding to government contracts. Last year, its Social Entrepreneurs Fund invested in three payment-by-result programmes under the Department of Work & Pensions’ Innovation Fund, and was among the lead backers of the UK’s first local authority Social Impact Bond.
The firm was established in 2002, with a mandate to achieve targeted social and environmental benefits whilst delivering returns to LPs. It has raised seven vehicles since then, totalling nearly £300 million. In addition to its Social Entrepreneurs Fund and Social Impact Bond Fund, these have included Sustainable Growth Funds I, II and III, the Bridges Sustainable Property Fund, and CarePlaces Fund.
The firm’s latest vehicle will be managed by the team behind the Social Entrepreneurs Fund.