Sir Ronald Cohen’s Bridges Ventures has launched the Bridges Social Entrepreneurs Fund, a UK venture philanthropy fund to invest in social enterprises such as The Big Issue, a newspaper sold by homeless people, and fair-trade coffee company Cafédirect.
The fund, which received its first commitment from the National Endowment for Science, Technology and the Arts, has so far raised $4.25 million (€5.1 million; $6.4 million) from a group of founder partners that includes Cohen, Nigel Doughty, Harvey McGrath, Apax Foundation, The Generation Foundation, Lehman Brothers Foundation Europe, Deutsche Bank, 3i and the Bridges Ventures team.
The development of social enterprises is being held back by a chronic shortage of long-term funding
Sir Ronald Cohen
No fundraising target has been set.
As an evergreen vehicle the fund will fund itself via the reinvestment of its proceeds.
“The development of social enterprises is being held back by a chronic shortage of long-term capital,” Cohen, founder of Apax Partners and Bridges Ventures, said in a statement.
The Bridges Social Entrepreneurs Fund will typically make investments of around £1 million in scalable social enterprises.
The launch of the fund follows the release of a report from Venturesome, a social investment fund providing finance rather than equity to social organisations, which found that one of the biggest challenges to the evolution of the social investment market is a “lack of clarity among the participants about the frameworks and parameters, even purpose, of the market place”.
The report goes on to highlight “confusion regarding the different models of civil society organisations, their social impact and expected financial returns”.