Social impact investing has increased eightfold in the UK in almost 10 years, with property funds making up nearly half of the market, according to research by Big Society Capital.
In its annual market sizing report, the social impact investor found this style of investing had reached £6.4bn in 2020, up from £833m in 2011. Social property funds had also grown eightfold since 2016 and accounted for 45% of the market. Social lending accounts for 43% of the market, seeing three-fold growth since 2011.
Sarah Gordon, CEO of the Impact Investing Institute, commented: “The social investment market sizing sets an important baseline that demonstrates not just how dynamic this market is, but how relevant it is for policymakers intent on increasing opportunities and addressing regional inequalities across the UK. We’re excited to be integrating this work into our own impact investment market sizing exercise, which will take a broader look at institutional capital dedicated to impact.”
Towards the end of September this year, Big Society Capital committed £780m, and £2bn alongside partners, to more than 1,500 social enterprises and charities. It said both new funds and existing funds such as the Community Investment Enterprise Facility and the Growth Fund have seen increased investment, but the report noted an uptick of new funds an investment as a result of the Covid-19 pandemic.
The report found consistent year-on-year growth of social impact investment, but noted a slight increase 2019-2020 (26% increase compared with 21% the previous year).
Stephen Muers, CEO of Big Society Capital, said: “Social enterprises and charities have been a fundamental lifeline for many of the millions who were furloughed, made redundant, or isolated from their regular social networks and support. They became frontline services for the nation and have played an important role in the recovery.”
He said although increased investment was welcomed, there is more to be done. “Momentum is building and social impact investment has a huge role to play,” he said.
“More and more investors are realising that it is possible to deliver both a social and financial return and so we are confident the market is on track to meet this ambitious target.”
