Triodos New Horizons
31-05-2012 | Youth service provider Greater Merseyside Connexions Partnership (GMCP) has started the recruitment of around 4,000 young people to take part in the Triodos New Horizons programme. The scheme will help young people in Merseyside, many of whom are young offenders, have learning disabilities, or are in or leaving care. The programme is run in one of the most deprived areas of the UK where unemployment and youth crime is above average.
Payment by results
The scheme is unique in the way it is financed. The Triodos New Horizons programme differs from typical social services schemes, as it is funded by private sector social investors, who provide at-risk capital funding. These investors will be repaid on a payment-by-results basis only when pre-agreed educational, training and employment targets are met. This way, the project has a three-way incentive to succeed. Firstly, investors see their money being spent on eradicating youth problems, while potentially earning a good return on their investment; secondly, four thousand individuals at risk of being NEETs* (Not in Education, Employment or Training) are given the opportunity to develop their skills and enter into work; and thirdly, taxpayers do not have to pay anything if the programme targets are not met.
Bringing people together
Triodos Bank is the first bank in the UK bringing together private investors and government funding to invest in social enterprises on this scale. The corporate finance team acted as lead adviser on the deal and, in partnership with GMCP, raised £1.5 million of funding for the programme in the form of a Social Impact Bond. This was invested in by a syndicate of leading UK social investors including, among others, Big Society Capital, Bridges Social Entrepreneurs Fund and CAF Venturesome. On behalf of investors, Triodos will retain a role in the performance management of the three-year scheme.
Building on experience
GMCP, a leading social delivery organisation with over twenty years of experience in Merseyside, designed the New Horizons programme. Together with local parties they will deliver the scheme. The contract was awarded through the first round of the £30 million DWP Innovation Fund, set up by the Government to support social investment projects over three years from 2012. The projects will support disadvantaged young people and those at risk. Via one-to-one coaching, youngsters will develop the mental resilience they need to overcome their personal challenges.
Dan Hird, Head of Corporate Finance at Triodos Bank, commented: "Triodos is pleased to have successfully structured this deal which creates a unique partnership between private sector investors and a longstanding social delivery organisation in GMCP. Our role included investor readiness advice for GMCP and the development and placement of a social impact bond which is capable of providing an attractive blended financial and social return to investors."
Kieran Gordon, CEO of GMCP, added: "The opportunity to tap into private investment from socially minded investors has enabled GMCP to develop and deliver innovative solutions for some of the most disadvantaged young people in our area. Support for many of these young people has been severely reduced due to cuts in public funding; by making the case for investment it has enabled us to deal with problems before they become the focus of crisis measures. The partnership formed with Triodos Bank and, through Triodos, the relationship we have built with investors is an exciting and we hope a productive one in realising common goals."
Notes to editors:
For more information please contact the Triodos Bank Communications team:
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About Triodos Corporate Finance
Triodos Corporate Finance works exclusively with sustainable businesses and has a long track record of advising businesses on raising capital through private placements and retail offers. The growth achievable from capital raisings helps businesses achieve the perfect balance between financial and ethical business objectives. Triodos has an enviable database of ethical investors keen to invest in the growing sustainability sector.
Over the past 12 months, Triodos Corporate Finance has raised over £25 million for businesses within the sustainability sector with investments from institutions, charitable foundations, private high net worth individuals and retail investors. Through our Europe-wide reputation and credibility in the sustainability sector, Triodos has unmatched access to potential clients.
About Big Society Capital
Further information about Big Society Capital can be found here: www.bigsocietycapital.com
About CAF Venturesome
CAF Venturesome provides unsecured loans of between £25,000 and £250,000 (over up to 5 years) to charities, social enterprises and community groups that have been operating for at least a year. Its investments are designed to meet a range of financial needs from working capital for cashflow support, to growth capital for transition or development. It also co-invests with other investors when organisations require a larger amount, and uses innovative financial mechanisms and products where appropriate. CAF Venturesome has a ten year track record and has loaned over £26 million to more than 300 organisations.
About Bridges Ventures
Bridges Ventures LLP ("Bridges Ventures") is a sustainable growth investor established in 2002 with a mission to use its commercial expertise to achieve focused social or environmental benefit, as well as attractive returns for investors. Bridges Ventures has raised six funds to date which total almost £275m: Sustainable Growth Funds I, II and III, the Bridges Sustainable Property Fund, CarePlaces Partnership and the Bridges Social Entrepreneurs Fund.
Seeded by the Bridges Ventures Charitable Trust, the Bridges Social Entrepreneurs Fund was launched in 2009. It is a quasi-equity fund which provides an innovative financing solution that is tailored to the needs of ambitious social enterprises. The fund invests in the form of equity-like capital, which shares in the risks but also the returns of social enterprises. Investments are coupled with hands-on advice and support to help the social enterprises realise their potential.
For more information please go to www.bridgesventures.com