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First ‘Social Impact Venture Capital Trust’ launched in UK
The FSE Group and Social Finance this week launched “Social Impact VCT” plc to raise up to £20m of onward investment in social enterprises and socially-motivated businesses.
It is the first diversified, professionally managed, fully listed social investment product available for UK retail investors.
Social Impact VCT will be jointly managed by the FSE Group via its FSA-authorised subsidiary, FSE Fund Managers Ltd, and Social Finance Ltd.
Both FSE and Social Finance are not-for-profit organisations working to develop the impact investment market in the UK. FSE Fund Managers Ltd will act as the fund manager and Social Finance Ltd will act as the investment adviser and focus on deal origination and social impact monitoring.
John Gregory, an established figure in the alternative investment world, will be chairing an independent non-executive board to oversee the investment vehicle.
Gregory said the VCT provided “an excellent opportunity to apply financial innovation to the challenges facing social businesses seeking to access growth capital”.
He continued: “There are hundreds of companies in the UK which make a real difference to our community, especially to those who are vulnerable or disadvantaged. The Social Impact VCT is a unique opportunity for individuals to invest in businesses that make a distinct positive contribution to society whilst delivering a financial return.”
Social Impact VCT is the first investment vehicle that allows retail investors to invest in businesses that put social impact at the heart of their mission. Its investment policy is to invest in social enterprises and socially-motivated companies that engage with people who are marginalised, vulnerable or disadvantaged, work in local communities to support cohesion, promote socially motivated brands and improve health and education provision.
The VCT will invest the majority of its funds in established, socially-driven companies looking to expand their geographic or product reach and/or whose revenues are underpinned wholly or partially by confirmed delivery contracts.
It is an 8-year planned exit, specialist VCT investing by way of secured or unsecured debt and equity.
Given the tax advantages available to subscribers for VCT shares, an eligible individual subscribing for £2,000 will generate an immediate £600 (30%) income tax relief on the initial investment. In addition, any dividends and/or capital gains are free of tax.
The offer opened on 13 November 2012 and is expected to close in respect of the 2012/2013 tax year at 5pm on 5 April 2013. In respect of the 2013/14 tax year, the offer will open on 6 April 2013 and close at 5pm on 12 November 2013, subject to the offer not being fully subscribed at an earlier date.
The Social Impact VCT prospectus will be available at www.socialimpactvct.co.uk
The FSE Group’s fund management team, recognised as the Best Early Stage Investment Team by British Business Angels Association in 2009, has a strong track record of funding organisations across a range of funding vehicles to successfully deliver growth through its investments. During the financial year ended 31 January 2012, the FSE Group had a total of £31.8m funds under management, including two mezzanine and one equity fund which collectively have delivered a cumulative £24m of investment to a total of 204 SME businesses which have successfully attracted £117m of additional investment.
Social Finance is a leading impact investment intermediary in the UK. It was established in 2007 and is an FSA regulated, not for profit organisation. It identifies ways of improving the access to capital for those looking to drive social change and develops investment propositions offering both social and financial returns.