As Anna Shiel, chief investment officer at Better Society Capital – one of the UK’s leading social impact-led investors – prepares to participate in the panel sessions at the Scottish National Investment Bank’s forthcoming annual conference, Karen Peattie hears how the organisation is tackling social issues and inequalities in the UK
FOR Anna Shiel, leaving a senior role in what many might describe as the “traditional” investment banking sector has opened her eyes to the benefits of investing for social impact – and why it is so important.
At Better Society Capital, where she is chief investment officer, its mission is to tackle social issues and inequalities in the UK by investing itself but also empowering others to invest in projects targeting high-profile issues including the reduction of child poverty, homelessness, long-term health and mental health conditions, childhood obesity and fuel poverty, for example – all amid a backdrop of economic and geopolitical uncertainty.
London-based Better Society Capital, which has the support of all the major political parties but is independent of government, is largely funded by dormant bank accounts and in parallel by the four main UK high street banks: Barclays, HSBC, Lloyds Banking Group and NatWest.
It was officially launched in 2012 – as Big Society Capital – and has now committed nearly £1 billion to a range of investments and the total market size has grown to £10bn, as Ms Shiel explained: “We’re an independent financial institution set up by the UK Government to increase the capital that is flowing to grow the social impact investment market.
“While we’re an investor ourselves and invest our own capital into a range of investments, we also undertake engagement activity to push that wider understanding of what social impact investment is and why other investors should get behind it.”
‘BROAD AND DIVERSE’
SHE noted that the market is “broad and diverse”, adding: “We are working with many different organisations and could be investing a sum as small as £10,000 into a very local project or £100 million for a major social housing investment – our scope is very broad and diverse.”
For partner investors wishing to get on board or initially explore opportunities in the social impact investment sector, knowing where to start is crucial. Social impact investment is not new, but it is for some. Engaging with the right people, therefore, who can advise and help potential investors understand how they can generate financial returns while also creating a positive social or environmental impact, is critical.
One source of information for charities and social enterprises is Good Finance, co-founded in 2016 by Big Society Capital and Access – the Foundation for Social Investment to help bring together key representatives from the social enterprise, charity and social investment sectors to launch an initiative tackling the challenges facing organisations seeking social investment – its key goal being to provide organisations that can benefit from investment access to the right tools and trusted information they need to make informed decisions.
“It’s a really interesting time for us,” said Ms Shiel, who joined the organisation in its early days and leads the team that invests and manages its portfolio with colleague Jeremy Rogers. She is also a member of BSC’s Investment and Executive committees.
Over the past 10 years, she has helped shape the organisations’ strategy and make investments which have significantly grown the UK social impact investment market. Notably, Ms Shiel has played a pivotal role in developing key components of market including social property funds, blended finance, place-based investment, and community finance.
Previously, she worked in investment and strategy in Merrill Lynch’s Financial Institutions Group. Ms Shiel was a board member of the ethical Charity Bank between 2014 and 2022 and is a member of Access’ Blended Finance Investment and Local Access Blended Investment committees.
‘POSITIVE CONTRIBUTION’
“I WAS mid-point in my career, and I wanted to look at different ways in how finance was serving society and perhaps make a more positive contribution,” Ms Shiel said. “I think one of the things that inspires me most is seeing how some of our investments have progressed through their life cycle and how they are so diverse, covering so many different sectors.”
So, how did Better Society Capital’s relationship with the Bank begin? “We engaged with the bank in its very early days of being set up and quickly identified a shared purpose and place in the investment ecosystem,” she explained.
“We have shared lessons and how we have approached different situations – we have similar values. For example, we have both invested into the Social and Sustainable Housing Fund.”
Homelessness remains a particular challenge that Better Society Capital is committed to, and it has invested in the £15m Energy Resilience Fund (ERF) which enables charities and social enterprises to reduce energy usage, stabilise energy costs, improve energy resilience, and contribute to long-term net-zero goals.
This blended fund, delivered by a coalition of fund managers and community interest companies, makes investments between £25,000 and £250,000 with 40% offered as grants to lower the costs of the loan.
Better Society Capital, which changed its name from Big Society Capital in April 2024 to more accurately reflect its areas of focus and long-term mission and make clearer its ultimate goal – to create a better society – is proud of its close partnership with the Bank as it works to create positive impacts for communities the length and breadth of Scotland.
“Social impact investing is about finding the best solutions and outcomes for communities and it is important to consider that impact investing has gone from being ‘niche’ to something that offers a wider spectrum of partners across investors and stakeholders,” Ms Shiel pointed out. “There are many different actors involved now – policymakers, philanthropists, charities, social enterprises – so that has broadened our reach.
“But it is important to understand that impact investing is a tool – it is both powerful and collaborative. And it is the job of Better Society Capital to bring all the different components together to help make change.
“But that can only work in practice when all those different actors are on the same page: how do I do this within my organisation; how do I scale up my organisation; who do I speak to? These are all questions organisations seeking investment are asking.”
BLENDED FINANCE
FOR Better Society Capital, one of the “big topics” just now is blended finance, which brings together different kinds of capital from various partners. “Some investors are very focused on their own mission,” Ms Shiel explained. “So, the ability to bring together a range of finance – government money, commercial finance, philanthropy etc – is a powerful tool.
“It’s how you build those structures but also about different business cultures – how you navigate that and bring it all together. There is always a learning curve for everyone – and we can learn from global markets too.”
Barriers, of course, do exist. As well as dealing with diverse cultures within organisations, another is that impact investing has been an “emergent and nascent” market. “If you are a small organisation with a small staff, looking at financing is time-consuming, for example.
For others, it is encouraging them to move outside their comfort zone and embedding all these things into their day-to-day operation,” added Ms Shiel.
“That’s why the forthcoming conference is an opportunity to network, make new contacts, build relationships, and share information as well as tapping into the entrepreneurial mindset that can bring a different perspective to help us all raise our ambitions about what can be done to achieve our goals.”
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Housing cash all under one roof
WITH a commitment to tackle homelessness among its diverse, purpose-driven goals, Better Capital Society is an investor into Social and Sustainable Capital’s second Social and Sustainable Housing Fund (SASH II) alongside SNIB.
This fund enables charities and community interest companies to buy properties which they would otherwise not be able to attain, building their financial strength, capacity, and resilience to enable them to provide high-quality services to their tenants.
The SASH II fund has a commitment to invest across the UK, with £15m investment from SNIB unlocking at least £20m of loans to organisations purchasing homes in Scotland. These homes are expected to meet high-energy efficiency standards, with investment ensuring that financed properties meet the same standards as homes provided by registered social housing providers.
Social and Sustainable Capital (SASC) was founded in 2014 as one of the UK’s first social investment funds. SASC launched its first Social and Sustainable Housing Fund (SASH) in 2019 with a portfolio that now includes properties across Scotland owned and managed by Homes for Good, Positive Steps Partnership, and Simon Community Scotland.
SASH II offers the same finance structure, allowing high-performing charities to build portfolios of properties, improving the lives of vulnerable individuals by increasing their access to safe, stable, and appropriate housing. SASH II has now made investments in Scotland with Positive Steps Partnership and Blue Triangle.
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Investing with Impact conference set to be a ‘Catalyst for Change’
THE conference on Monday, March 3, will focus on impact investing – what it means in reality, why it matters, and sources of capital.
A panel discussion on this subject will feature speakers including:
■ Nick Moon, Chair, Circulate Capital and NXD, Scottish National Investment Bank (pictured right)
■ Anna Shiel, Chief Investment Officer, Better Society Capital
■ Emma Thorne, Partner, Private Equity, Bridges Fund Management (pictured right)
In a session titled ‘Scaling up businesses for international markets’, speakers will explore how businesses can attract overseas investment and operate in international markets. Participants include entrepreneur Mark Bamforth.
Another panel session: Housing and the Economy, will focus on housing as an essential lever for economic prosperity across Scotland. It will be hosted by Sara Thiam of Prosper, with speakers William Kyle of Thriving Investments and James Blakey of MODA.
The chair of the Scottish National Investment Bank, Willie Watt, will also address the conference which will be hosted by Zara Janjua and introduced by The Herald editor Catherine Salmond.