Deutsche Bank launches £10m social investment fund
November 2011
A new £10m social investment fund, the first investment bank to create a UK fund dedicated to supporting social projects with a financial return, has been launched by Deutsche Bank.
Socially responsible investment (SRI) funds have been available from investment management firms such as Newton Investment Management and Rathbones for a few years - see the Caritas supplement on socially responsible investment here, together with the now revised Charity Commission Guidance on socially responsible investment here.
Deutsche Bank’s Impact Investment Fund will operate as a fund of funds working with portfolio managers to channel investment into sustainable social businesses over the next three years, aiming to generate a return that more than covers its costs over the next ten years.
The aim of the fund is to develop businesses that have the potential to grow profitably while providing local communities with social benefits such as employment, education and training. Bankers will also work alongside the funds to give financial advice to social entrepreneurs.
The fund will be managed to external market standards by investment managers in Deutsche Bank’s Private Equity group.
At a time of public sector spending cuts and concern about the sustainability of grant funding, the fund aims to pave the way for a new asset class that will attract a wide range of investors and turn the UK into a hub for social impact investing in early-stage growth industries such as long-term care, preventative health treatments and rehabilitative skills and training.
Colin Grassie, CEO of Deutsche Bank UK, said: “Deutsche Bank will help to create a new asset class that we hope will attract a wide range of investors and deliver a significant amount of money to social enterprises.
“All banks need to put something back into the societies that sustain them. We believe that with sufficient backing from financial institutions prepared to invest not just money but time and skills as well, a new sector of socially responsible businesses can emerge.”
Deutsche Bank made an initial social investment in September last year, contributing to Big Issue’s flagship fund, whose investments include Jamie Oliver’s Fifteen Foundation, training disadvantaged young people as chefs, and Hackney Community Transport, which has brought on local long-term unemployed people as bus drivers.
Comments
Michael Harper, 09/11/2011
This is an excellent opportunity to potentially quell some of the recent protest and concerns in communities around the world. With the fallout of global banks and the recent ills of MF Global- Stakeholders are becoming increasingly aware of the imbalance between investment return objectives and overall impact within local and domestic comunities. Social investments are extremely critical in today's environment as we seek to tackle global concerns while producing yield for investors who provide risk capital and seek commensurate returns for their exposure.. Reciprocal value may produce lower economic return, but the enduring value produced will create opportunities to transition to a more sustainable long term model. Social Investments, Philanthrocapitalism, Social Venture Philanthropy, and PPP are necessary particulary as we add billions of more people to the equation.