Schroder BSC Investment Trust raises £75m from London IPO in impact investing first
The Schroder BSC Social Impact Trust, created by Big Society Capital in partnership with global investment manager Schroders, has raised gross proceeds of £75m from its IPO on Thursday.
The company has issued 74,999,999 ordinary shares priced at £1 each. The shares will start trading on the London Stock Exchange on Tuesday 22 December.
The trust will use part of the net proceeds to acquire seven assets from Big Society Capital, with the balance of the net proceeds to be invested in accordance with the company’s investment policy and/or used for working capital purposes.
The seven assets in the trust’s initial portfolio are listed in the prospectus published on 23 November as UK Affordable Housing Fund, Resonance Real Lettings Property Fund, Social and Sustainable Housing LP, Charity Bank Co-Investment Facility, Rathbones Charity Bond Portfolio, Bridges Evergreen Holdings and Bridges Social Outcome Funds II LP.
Schroders and BSC just managed to reach the lower end of their estimate – they had expected to to raise between £75m and £100m – but they are “very, very pleased” with the outcome, Jeremy Rogers, chief investment officer at Big Society Capital told Pioneers Post. The conditions for an IPO were extremely challenging at the moment, he added, as building a trusting relationship with investors via a video call was “very difficult”.
Investors include wealth managers and other financial institutions such as pension funds. Much of the demand came from wealth managers on behalf of their clients – high-net worth individuals, endowments – who are explicitly asking for more socially and environmentally impactful investments, Rogers said.
“A lot of social impact funds are in private markets, that’s quite difficult to access, and this is the first time that people can directly access, through a publicly-listed product, leading social investment managers like Resonance, Bridges or others,” said Rogers. “So that really came from clients asking their asset managers, ‘Can you make it easier for us?’ – and this is what this product is doing. It is just making it as simple as possible for someone who wants to invest money that flows through significant organisations and it’s our job to absorb all the complexity in the middle.”
This is the first time that people can directly access, through a publicly-listed product, leading social investment managers
Between 75 and 150 social enterprises and charities across the trust’s portfolio will benefit from the money raised, said Rogers. The trust will give full transparency so investors can directly see where their money is having an impact.
It is the first time a trust dedicated to impact investing had gone public on a stock exchange, and similar projects were being considered elsewhere in the world, Rogers said.
Rogers said Big Society Capital would be looking at the shares’ performance in the long term, and would adjust strategy according to how the markets are viewing the trust’s results.
In a statement Susannah Nicklin, chair of the Schroder BSC Social Impact Trust, said: “We are delighted by the launch of this unique social impact trust, which will provide investors with a diverse mix of social impact investments at a time when social issues are understandably at the forefront of the minds of many investors.”
Big Society Capital was set up in 2012 with £425m from dormant bank accounts in England and £200m from the largest UK banks (Barclays, HSBC, Lloyds Banking Group and NatWest Group).
It has a mandate to grow the overall social investment market, and recently reported that impact investing in the UK had achieved a six-fold increase, to over £5bn, in the past eight years.
The Schroder BSC Social impact Trust has been launched to invest in social impact investments that seek to address a range of issues, including tackling homelessness, providing support for people with learning disabilities, providing housing for survivors of domestic abuse as well as enabling improved access to quality care services for physical and mental health conditions. The trust hopes to raise between £300m and £500m over the next five years.
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