“A public/private initiative to support social enterprises”
The European Investment Fund (EIF), with the collaboration of private sector investors, has launched the Social Impact Accelerator (SIA), the first pan-European public-private partnership for social impact investing. SIA is a pilot initiative which addresses the growing need for availability of equity finance to support social enterprises, a segment of the business world which is becoming increasingly instrumental in promoting social inclusion, providing alternative sources of employment for marginalised social groups and contributing to growth.
SIA, which is set up as a fund of funds, seeks to mobilise an initial amount of EUR 60m of capital for investment in social impact funds. Crédit Coopératif and Deutsche Bank are joining the European Investment Bank Group (European Investment Bank and EIF) at first closing as part of an undertaking to pioneer strong public-private partnership in the sector. Other private sector investors are expected to join upon completion of their due diligence processes. SIA will be managed by EIF and will provide equity financing to funds in the social impact segment which strategically target social enterprises across Europe. Beyond simple financial return targets, these social impact funds seek to trigger positive societal change as a result of their impact conscious investment activity.
In addition to enhancing the availability of finance for social enterprises, SIA aims to build up the existing market infrastructure for social impact investing in such a way that this emerging asset class is placed on a path to long-term sustainability. As part of this drive, EIF has developed a new framework for quantifying and reporting on impact metrics at all levels of the SIA investment chain. SIA will also ensure that knowledge-sharing between private sector actors committed to social impact investing and EIF becomes a core part of the initiative from the outset.
Commenting on the launch, Richard Pelly, EIF’s Chief Executive, said “We are convinced that social impact investing will shape the way many people invest in the future. One cannot think only in terms of financial returns anymore. SIA will endeavour to respond to the financing needs of social enterprises that focus on scalable social impact as the core of their business activity. Our approach is to make all actors in the SIA investment chain - whether social enterprises, social impact funds, and also EIF - accountable for their results in delivering social impact through their activities. Together with our private sector partners we also seek to demonstrate that this is an attractive asset segment also for mainstream investors.”
EIF’s launch of SIA is a first step in the EIB Group’s strategy of pioneering activity in the impact investing space as well as responding to the wider EU policy aim to establish a dedicated European-level instrument in support of social inclusion and social enterprises in Europe..
EIF's central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 6.9bn at end 2012. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 4.7bn in close to 255 operations at end 2012, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor