Schroders and Big Society Capital to launch UK social impact trust to improve lives of those in need

Schroders and Big Society Capital (BSC) have announced the intention to launch the Schroder BSC Social Impact Trust plc (the Company), a new investment trust strategically positioned to address significant social challenges in the UK.

Schroders and BSC are seeking to raise £100 million, via an initial public offering.

The Company’s objective is to deliver measurable positive social impact as well as long term capital growth and income, through investing in a diversified portfolio of private market impact funds, co-investments alongside impact investors and direct investments in order to gain exposure to private market Social Impact Investments.

The Company provides a diversified private market impact portfolio with a low correlation to traditional and public financial markets. It aims to deliver a net asset value total return of CPI plus two per cent per annum[1].

The Company seeks to invest across a range of issues including tackling the significant increase in homelessness, providing support for people with learning disabilities, providing housing for survivors of domestic abuse as well as enabling improved access to quality care services for physical and mental health conditions.

The Company offers investors an opportunity to benefit from a seed portfolio with an aggregate valuation of £40 million on an invested basis, plus outstanding commitments such that the aggregate value on a total commitment basis is approximately £60 million, reducing ramp up time and cash drag by providing swift investment exposure to hard-to-access assets. The strategy is underpinned by the combined expertise of a global asset manager in Schroders and BSC, one of the UK’s leading impact investors.

BSC has an established reputation and track record in social impact investing; its main focus is to deliver sustainable financial returns and a measurable positive impact on people’s lives in the UK. A key feature of the Company will also be to provide transparent and clear reporting, aligned with the UN Sustainable Development Goals and the Impact Management Project’s five dimensions of impact, evidencing the positive social impact that is being delivered by organisations that receive investment

Andy Howard, Global Head of Sustainable Investment, Schroders, commented:

“The connection between social impact and investment is deepening and expanding across financial markets.  At Schroders, we have been focused on the implications of that shift across our entire business, and on meeting the changing demands of our clients.

“It is clear that our clients are looking for new ways to connect their investment goals and sustainability concerns to produce measurable social impact as well as a financial return.  Our solution offers individuals and institutions exposure to a different type of impact product – a high impact diversified portfolio of specialist investments that help improve the lives of people in the UK. These investments are anticipated to be long term, low volatility and have low correlation to equity market movements.

“We are very excited to combine Schroder’s expertise, infrastructure and investment experience with Big Society Capital’s recognised leading position in the UK impact investment industry.”

Jeremy Rogers, Chief Investment Officer, Big Society Capital, commented:

“The current coronavirus pandemic is exacerbating many social challenges from homelessness to domestic abuse. Social impact investing can directly help the charities and social enterprises tackling these problems, for example, by enabling them to provide accommodation and support for those experiencing homelessness and survivors of domestic abuse. 

“Now more than ever, investors want their investments to deliver significant local impact. This new trust gives investors the opportunity to access high impact investment solutions with diversified returns away from public markets.”

Commenting on the launch, Susannah Nicklin, Chair of the Company, said:

 “I am delighted that we are able to bring this social impact trust to the market at a time when the UK is facing some significant headwinds, particularly on social issues. This trust brings together the powerhouse of Schroders, a leading global asset manager, working alongside Big Society Capital, one of the UK’s leading impact investors.

 “Schroder BSC Social Impact Trust will bring together a diverse team of investment professionals with experience in portfolio management, sustainability, impact investing, government policy and social enterprises. Our intention with this trust is to provide investors and the investment sector with a best-in-class impact trust.”

 

"NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT"

"This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The Shares have not been and will not be registered under the U.S. Securities Act of 1933 (as amended) and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

This announcement may not be used for the purpose of, and does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Shares in any jurisdiction where such offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on Schroder BSC Social Impact Trust plc (the “Company”), Schroder Unit Trusts Limited, Big Society Capital Limited or Winterflood Securities Limited. The offer and sale of Shares has not been and will not be registered under the applicable securities laws of Australia, Canada, the Republic of South Africa or Japan. Subject to certain exemptions, the Shares may not be offered to or sold within Australia, Canada, the Republic of South Africa or Japan or to any national, resident or citizen of Australia, Canada, the Republic of South Africa or Japan.

In addition, the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended, and the recipient of this [document] will not be entitled to the benefit of that act."

 

[1] Once the portfolio is fully invested and averaged over a rolling three- to five-year period, net of fees