First Impact social investment fund races to halfway mark

Thoms Gillan, director at SIS Ventures. Picture: contributed.
Thoms Gillan, director at SIS Ventures. Picture: contributed.
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A recently launched “profit with purpose” fund has raced to the halfway point of its first investment target.

Within two months of being launched, Impact First, a fund established by SIS Ventures to back Scotland’s high impact enterprises, has secured £750,000 from investors looking for both a social and financial return. This amounts to 50 per cent of the fund’s target capital commitments, as it seeks to raise £1.5 million to £2m from UK-based private investors at its first close.

SIS Ventures, part of Social Investment Scotland, is in the process of securing investors to participate in the £5m fund, which it said had also attracted “significant demand” from mission-driven organisations seeking funding.

Benefiting from the Enterprise Investment Scheme (EIS) and social investment tax relief (SITR), the fund offers investors a portfolio of between six and 12 “high-growth potential, high-impact enterprises” looking to tackle a social issue with a scalable and disruptive business solution.

Prior to establishing Impact First, SIS conducted a market study revealing that entrepreneurs felt early stage investors often overlooked social impact. It hopes to provide capital to these entrepreneurs to develop and grow their business with a mission-led approach, resulting in a more sustainable economy.

Thomas Gillan, director at SIS Ventures, said: “The response from both investors and enterprises within the first two months since launch has been very encouraging.

“As a hybrid fund, investors are being offered a unique vehicle to invest in high growth potential, socially-focused businesses offering both a financial and social return.

“It’s good to see investors seizing the chance to become part of something truly ground-breaking and really move the needle for social impact investing.”

Bob Hair, wealth planning director and head of Edinburgh office at wealth manager Cazenove Capital, said he had observed a steady increase in demand from investors looking for opportunities to make a social impact.

He said: “There are numerous regional vehicles in the UK where investors can invest for purpose and also benefit from generous tax reliefs but here in Scotland those opportunities are limited.

“Many investors want to see a difference being made in their own communities but this is a highly specialised area and so it is encouraging to see professional and specialist investors such as Social Investment Scotland lead the way.”

Social Investment Scotland is the largest organisation of its kind north of the Border in terms of lending.

Since being established in 2001, the lender has invested more than £60m across Scotland.