UK has potential to be global leader in social impact investing

This morning sees the launch of a report, Making Good in Social Impact Investment: Opportunities in an Emerging Asset Class, sponsored by us and commissioned by The Social Investment Business, with a foreword by Cabinet Office Minister Oliver Letwin.

The report suggests that social impact investment has the potential to evolve from being an emerging market to a very large, mature investment market attracting mainstream investors. It argues that the UK is well placed to be a global leader in the field, as social impact investment builds on our record as home to a well-developed, not-for-profit, charitable and voluntary sector and our historic strengths in financial services.

Authors Dr Rupert Evenett and Karl H. Richter explain the need for an integrated social impact investment market with a range of financial products suitable for the different stages of social sector organisations’ development. They conclude that social impact investment has all the characteristics of a distinctive asset class – best understood as an intermediate capital market with features of both debt and equity – which, from an investor’s perspective, can offer sustainable financial return, assessable risk and the potential for diversification.

The report is clear that the social impact investment market needs to be built around the needs of its customers – social sector organisations – and that their voices are heard loud and clear. The authors solicited the views of experts within organisations that both provide and seek social investment; the ‘bottom up’ views of leaders of social sector organisations, contributions from senior figures at commercial and social investors.

Follow this link for an executive summary of the report. The full report can be found here.