BSC and Schroders Offer Impact Investment to Retail Investors
Working with Big Society Capital, Schroders has launched a listed Schroder BSC Social Impact Trust to bring impact investment to ordinary investors. The fund uses a diversified Social Impact Investment strategy to deliver a positive social outcome with a financial return. Its principal investments will be in high impact housing, debt for social enterprises and public/private social outcomes contracts.
The Schroder BSC Social Impact Trust will be available via financial intermediaries and share dealing platforms such as Hargreaves Lansdown, Interactive Investor and AJ Bell’s You Invest.
The fund is targeting investment returns of CPI +2%, net of fees, with a target yield of 1%-2% and low correlation to mainstream investments. The issue size is £100 million with Big Society Capital providing a seed portfolio of £60 million to reduce the time it will take for the fund to become fully invested.
The social impact of the fund will be measured in alignment with the UN Sustainable Development Goals and the Impact Management Project. The fund will undertake an annual impact review and provide in-depth transparent reporting via an interactive website. The reporting will show where the fund’s assets are invested by region, enabling investors to see how their investment is having an impact across the UK.
The management fee is 80 basis points on top of underlying management fees of around 1%.
Big Society Capital will provide day-to-day portfolio management, investment selection and investment origination for the fund. Schroders will provide risk oversight and support distribution of the fund.
The fund launch opens a new chapter for impact investment in the UK creating the opportunity for mass market participation in this asset class. The growth of the fund will undoubtedly be monitored closely as a bellweather for wider retail interest in accessible impact investment vehicles.