SOCIAL INVESTMENT PROMISE AND POSSIBILITY

Dan Gregory, November 2012

COMMON CAPITAL

Mutual and social enterpriseFunding and finance Policy and practice

PERSPECTIVE

Social investment

vs.

Access to finance

DEFINITION

• Impact investment vs. social investment (Zweck / Wert)

• Funding (revenue / income) vs. finance (capital / investment)

• Repayable vs. non repayable

• By socially minded or in socially minded

• Tens of millions or billions?

• Equity, debt + hybrids

• Social considerations?

• Sub-commercial?

UNDERCAPITALISED?

• Unequal distribution of capital

• Relatively underleveraged

INVESTMENT READINESS

• Almost half simply not interested

• Those who already have investment mainly have asset backed loans

• Appetite for <£100k long-term sub-commercial risk capital

BARRIERS?

“little evidence that social enterprises are either riskier or less well understood ... no significant difference between social enterprises and mainstream businesses in the number that had been rejected.”

“4% of social enterprises sought to issue equity… less than 3% of SMEs seek equity finance”

JUST TURN ON THE TAPS!?

Business models in areas of market and government failure

INNOVATION / TRADITION

If innovation is the application of old ideas in a new context

• Stock exchange

• Investment bank

• Private finance initiative (PFI)

Or old ideas coming back into fashion

• Community shares

• Old-fashioned banking

• Disintermediation

METRICS

Instrumentalist / McKinsey / Blairite ‘what works’ / deterministic / evidence Taliban (Zweck?)

vs.

Trust / governance / ownership / participative capitalism / engagement (Wert?)

RHETORIC AND REALITY

“There aren’t actually any social investors are there?”