Straight to content

UK social impact fund backing underrepresented groups reaches first close

Written by:
Published: 18 January 2023

The Growth Impact Fund invests in UK social enterprises and organisations from underrepresented backgrounds and has secured £8m investment from leading social investors

The Growth Impact Fund will back diverse-led social enterprises and organisations across the UK | Photo by FatCamera on iStock

The Growth Impact Fund (GIF), targeting £25m (€28.4m) of investment in UK social enterprises and organisations from underrepresented backgrounds, has reached a first close of £8.2m.    

The fund was formally launched by Big Issue Invest (BII), UnLtd and Shift in May 2022 as a response to the findings of the Adebowale Commission on Social Investment. The commission concluded that the UK social enterprise market had progressed little over the last decade or so, saying it was “fundamentally the same in 2019 as it was in 2011”, and that  social investment continued to have a serious problem with inclusion and equity particularly, in relation to race.   

Bank of America and Access – The Foundation for Social Investment were early supporters of the fund which has recently secured further investment from Big Society Capital, Greater Manchester Combined Authority, the University of Edinburgh, Scope, Trust for London, Joseph Rowntree Foundation, Charities Trust, Barrow Cadbury Trust, and philanthropist Nick Marple. 

GIF, which is managed by Big Issue Invest Fund Management, provides social businesses with the option of patient, flexible capital to scale up impact, or alternative options, including 70% of funding invested through equity and quasi-equity products. A minimum of 50% of funding is ring-fenced for leaders from underrepresented backgrounds. 

The fund – funded by professional investors only – will offer between £50,000 and £2.5m to investees. Organisations in which the fund invests will also gain access to grants and non-financial assistance to expand their businesses and impact. 

“We are delighted to have our new investors backing diverse-led organisations across the UK. Everyone agrees that something needs to rectify inequalities in social investment, and by doing things differently we hope that we can scale up some amazing entrepreneurs, making a difference to their communities who might not have been supported otherwise,” Sarah Faber, the fund’s investment manager said. 

BII, UnLtd and Shift said they were renewing their call for applications from eligible UK-based entrepreneurs. GIF has not detailed any investments so far, but Mathu Jeyaloganathan, head of investment at UnLtd, said investment announcements were “coming soon”. 

To qualify for funding, over 75% of the board and 50% of the management team of a social business should fall into at least one inclusion groups – Black, Asian or minority ethnic, disabled, women or LGBTQIA+. Alternatively, they must have lived experience of a social challenge or experience of socio-economic disadvantage. 

The fund will use a Diversity, Equity and Inclusion (DEI) Toolkit – developed by BII, UnLtd and Social Value UK – to assess potential investees’ plans for improving DEI and  provide support accordingly. An open-source version of the toolkit will be shared during the next year, according to GIF.  

Big Issue Invest is the social investment arm of the Big Issue Group, whose first business was the Big Issue street newspaper. Since 2005, it has made £44m of impact loans to more than 400 hundred social enterprises, alongside nearly £27m in larger, patient capital investments. 

UnLtd has supported more than 15,000 social entrepreneurs via awards and investments, totalling £94.9m since 2002. Shift designs programmes to maximise impact with social organisations. 

Share on social media

Latest articles