holly-circle-120x120px

Holly Piper

Head of CAF Venturesome

Charities Aid Foundation


GROUND-BREAKING ENGAGEDX REPORT LAYS BARE SOCIAL INVESTMENT TRACK RECORD

9 June 2015

We were delighted to see the publication of the ground-breaking EngagedX report on Friday.  This is the first independent data study into a key segment of the UK social investment sector, made possible when CAF Venturesome, alongside fellow social investment pioneers Key Fund and Social Investment Business, opened up our data to the EngagedX team. In case you missed it, the full report is here (complete with dataset for like-minded data geeks!).

Whilst “ground-breaking” is an excitable word for a Tuesday morning, we think that this is justified by the gauntlet of transparency this report represents to the rest of the sector.  There are lots of juicy nuggets in the main report (which will no doubt be hotly debated in the forthcoming webinar), but our top three gems are:

1.  Social investment ‘works’: the EngagedX report looked at 426 closed social investment deals, and an impressive 90% of capital was preserved.  The total return of  negative 9.2% is comparable to SME market lending over the same period, as the report points out.

2.  Finance is not enough, flexibility and engagement are crucial: the complexity of the EngagedX analysis is testimony to the high level of customisation of the social investment deals.  Many deals involved “unscheduled interest-free periods, repayment holidays, or restructuring”.  And all three social investors worked (and work) incredibly closely with investees throughout the social investment process.  We believe that the flexibility and engagement which many social investors offer can be as important as the finance itself.   

3.  Not all social investments are created equal: there is a significant range in the financial performance.  Across the 426 social investments made, 302 repaid capital in full, 84 made partial repayments, and 40 were written off.  CAF Venturesome manages a wide range of social investment funds, which are differentiated by the appetite for financial risk. Reassuringly, our lower-risk funds performed significantly better – indeed, made a small surplus – than the appropriately-named Higher Risk Fund (this latter fund was piloted, but is no longer making social investments). However, what this finance-focused report cannot illustrate, is that the Higher Risk Fund was a vital lifeline to the handful of social organisations it supported.

We strongly believe that greater transparency about the performance of social investments is crucial to the sector’s evolution, and its continued ability to support charities and social enterprises to thrive. We look forward to discussing this in more depth in the webinar on Tuesday 23 June, please email contact@engagedx.com to register your interest.

Want to know more about CAF Venturesome? 

Talk to our team on 03000 123 300 or email us at venturesome@cafonline.org and we’ll be happy to help.

RELATED CONTENT

Nine misconceptions about social investment


Are you an organisation looking to secure funding? Have you considered social investment or want to understand how it could help your organisation?

Loan finance - are charities missing an opportunity?


Is your charity thinking about loan finance, but feel that you haven't quite got enough details to make an informed decision?

Meet the team behind CAF Venturesome


An introduction to our team, who have a wealth of expertise in helping charities access social investment.


Charities Aid Foundation © 2018 | Registered Charity Number 268369
25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4TA Telephone: 03000 123 000
10 St. Bride Street, London EC4A 4AD Telephone: 03000 123 000

Anti-Slavery and Human Trafficking Statement