The €400m Fondo de Impacto Social (FIS) has invested €15m into the Global Social Impact Fund II which supports SME’s contributing to the economic and social inclusion of vulnerable communities in Spain.
Fondo de Impacto Social (FIS), the €400m social impact fund managed by COFIDES, the Spanish state-owned commercial company which also operates as a development finance institution, has invested €15m into the Global Social Impact Fund II (GSIF Spain).
The fund, which is managed by Global Social Impact Investments, a Spanish fund manager specialising in social impact investing, has raised €63m to date to invest into growth companies focused on improving the economic and social inclusion of vulnerable communities across Spain.
Other investors in the fund include the European Investment Fund (EIF), which announced last July that it had invested €22.5m.
Social impact
Speaking to Impact Investor, Raúl Sánchez, director of impact investments at COFIDES, who also heads up FIS, said that more than 60% of impact funds in Spain today are environmental or climate change-related funds and that the investment into GSIF Spain would allow FIS to redress the balance in its portfolio between social and environmental impact.
“GSIF Spain is a dedicated social impact fund. Around 80% of its portfolio will try to address key social issues such as the social inclusion of disadvantaged communities, including people with disabilities. We have confidence in the investment team and María Ángeles León, co-founder and CEO of Global Social Impact Investments is a pioneer of social impact, having previously invested in Africa and now Spain,” said Sánchez.
Sánchez said FIS was also impressed with the fund’s focus on mentoring start-ups.
“Mentoring is really important, particularly for social impact start-ups to help them, for example, to maintain or improve their financial stability or impact investment measurement,” he added.
Social and environmental challenges
GSIF Spain has invested into four social impact companies to date which promote inclusive and quality employment opportunities, provide access to goods and services and focus on the development of sustainable solutions to social and environmental problems in the country. The fund focuses in particular on investment opportunities that support vulnerable communities, including people with disabilities, women and children, migrants and the long-term unemployed.
The investment in GSIF Spain is FIS’s third investment since its launch last July following legal framework approval by Spain’s Council of Ministers, the main collective decision-making body of the Spanish government. It previously invested into two other Spanish impact funds, including €30m into IB Deuda Impacto España and €19.5m into Q-Impact Fund II, and has made three other commitments, which are yet to be announced. Sánchez said the fund aimed to have committed to invest close to half of its assets (€200m) by the summer.
“We have a lot of flexibility as to where we can invest as long it is into impact investments. This includes European based funds with portfolio allocations to Spain. All eligible investments must also respond to one or more of the 11 social and environmental challenges we identified in Spain,” said Sánchez.
These challenges include equality and social inclusion, responsible consumption and production and health and wellbeing, among others.
FIS can invest directly into companies, foundations, associations and non-governmental organisations as well as into impact investment funds and other financial vehicles. The €400m public investment in the fund has been channelled from the EU’s Recovery and Resilience Facility as part of Spain’s Recovery, Transformation and Resilience Plan, which was set up in response to the dual economic and social crisis triggered by the COVID-19 pandemic.
