New fund for social investors
This week sees the launch of the first UK-wide fund to take advantage of the Social Investment Tax Relief, which offers high net worth investors 30 per cent income tax relief.
The Bright Futures Fund, from Social Finance and Kin Capital, is aiming to raise £3 million to invest in charities and social enterprises working to improve the lives of children, young people and vulnerable groups across the UK.
The Bright Futures Fund will look to provide an annual return of 4% (net of cost), before the 30% income tax relief granted under SITR.
In July 2014 the government introduced SITR to encourage investment in charities and social enterprises, giving these organisations access to growth capital like commercial businesses.
So far, the uptake has been less than hoped.
David Hutchison, Chief Executive of Social Finance said: “Charities and social enterprises do not rely solely on donations and grants. For many, their primary income comes from government contracts that allow them to deliver services to vulnerable populations. This Fund is an exciting proposition as it offers investors the opportunity to use their money to drive social good while achieving a solid financial return.”
Charities and social enterprises are increasingly looking for finance that allows them to develop and scale their activities to meet rising social needs and deliver high quality public services. The new fund will invest in around 12 charities and social enterprises that each have a minimum of £1 million earned revenue and a three-year trading history at the point of investment.
Kin Capital Partners will manage the fund, which is open for investment from today.