Retail Investors Offered UK Social Investment Bonds

In the UK, individual investors are being offered the chance to make a responsible investment via a Social Impact Bond – the first time individuals have been able to become involved in the SIB movement.

Offered by Allia, a charitable social investment organisation, the Future for Children Bond will invest into the social impact bond (SIB) for Essex County Council to improve the life outcomes of children aged 11–16 at risk of going into care.

Retail investors will have the opportunity to invest in making a positive social impact that will repay capital plus a variable return according to success.

Allia says £1 million of bonds are on offer with a minimum investment of £15000 for the eight year term. Minimum return to investors will be 100% of funds invested.

It says for every £1,000 invested in the Future for Children Bond, £780 will be loaned to Places for People Homes, a Moody’s AA rated housing provider that builds, sells and rents homes and provides services and support to those who live in them.

The repayment of this loan plus compound interest will equal £1,000, enabling Allia to give investors back the amount they originally invested.

After Allia’s costs, the remaining £200 will be invested in the social impact bond (SIB) for Essex County Council, developed by Social Finance Limited.

“We are keen to expand the investor base into the Social Impact Bond market and are delighted to partner with Allia to offer this investment opportunity to retail investors through the Future for Children Bond,” David Hutchison, the CEO, Social Finance said:

“We’re seeing growing interest amongst investors in using their investment funds to achieve a social impact as well as providing a financial return. Our capital plus bond gives the first public opportunity for individual investors to take part in this kind of innovative high-risk high-impact model,” Tim Jones, Allia’s Chief Executive said.

“With the Future for Children Bond, investors can help give a better future to some of society’s most vulnerable young people, with the potential for sharing in the financial benefits while also keeping their capital at very low risk.”

If the programme is successful in reducing the amount of time children need to spend in care, it will result in cost savings for Essex County Council, which can be used to provide a return to the investors in the SIB. Data on the number of care placement days for children in the programme will be tracked on a monthly basis and investors in the Future for Children Bond will be updated annually on the payments received.

The first UK SIB started in 2010 for Peterborough Prison by Social Finance.

For more information go to www.allia.org.uk/futureforchildren