"Social enterprises can deliver real growth and services that have the potential to relieve some of the burden currently on the public purse."
NESTA has announced that it is contributing a cornerstone investment of £1 million to Big Issue Invest's £10 million Social Enterprise Investment Fund to create capital for growing UK-based social enterprises.
Nigel Kershaw, CEO of Big Issue Invest, said: "I am delighted with NESTA's investment. It clearly demonstrates confidence in who we are, what we do and what we are trying to achieve.
"Our Social Enterprise Investment Fund will provide risk capital for social enterprises that have the capacity for scale, profitability and significant social transformation. By proving that social enterprises can deliver both social and financial returns we can create an embryonic asset class and a sustainable source of capital to drive social change.
"This is a very exciting time to be in business as the recession is continuing to give birth to all sorts of great ideas that create social opportunity and environmental sustainability. We already have a strong pipeline of investment opportunities. Most are in the areas of jobs, education and training, health and social care and the environment."
Through the fund we aim to show that social enterprises can improve the delivery of public services. With better public services we can deliver a better future for everyone".
Jonathan Kestenbaum, chief executive of NESTA said, "Social enterprises can deliver real growth and services that have the potential to relieve some of the burden currently on the public purse.
"It is a model that NESTA hopes will gain wider support as it offers an opportunity to solve problems that have been unresponsive to conventional solutions and are often financed by the tax-payer. Our social finance programme is showing how catalytic investment such as this can create lasting change."
The Fund's investments in social enterprises are expected to range from £100,000 to £500,000. It will finance the growth of existing social enterprises, but will also consider earlier stage businesses that have a compelling business model and strong management.
Financial returns from the fund will be generated through a mix of turnover and profit royalties, interest payments, and capital gains through equity sales. The fund will make between 25 and 30 Investments with an expected average term of five years.
NESTA's investment is the second large investment in the Fund and follows a £750,000 commitment from the Esmée Fairbairn Foundation.
The fund has also attracted City institutions such as Nabarro, the law firm, PricewaterhouseCoopers, the accountancy group, and HSBC, all of which are helping on a pro bono basis
For more information contact NESTA Communications Officer, Catherine Anderson on Catherine.email@example.com or 0207 438 2609.
About Big Issue Invest
Big Issue Invest, the investment arm of The Big Issue founded by Gordon Roddick and John Bird MBE, is launching a £10 million fund to invest in growing UK-based social enterprises with the potential for rapid expansion. Its CEO is Nigel Kershaw who is also Chairman of The Big Issue
Ron Sheldon, a managing director of Advent International, the private equity company, is chairing the Fund's Investment Committee. The overall chairman of Big Issue Invest is Robin Monro-Davies, a former chief executive of Fitch Ratings who sits on the boards of HSBC and Axa.
NESTA is the largest independent endowment in the UK and its mission is to support innovation to drive economic recovery and solve some of the UK's major social challenges.
NESTA is a world leader in its field and is in a unique position to support and promote innovation through a blend of practical programmes, policy and research, and investment in early-stage companies.