Triodos Bank has acquired consultancy Evidence Based Social Investments Limited (EBSI) to advise local authorities on commissioning Social Impact Bonds (SIB) for financing social support programmes. Completed this November, the acquisition includes EBSI's pipeline and all ongoing projects and extends the bank's commitment to the emerging SIB sector in the UK.
The deal extends the range of advisory services provided by Triodos Bank's Corporate Finance team which helps clients develop and finance new social interventions to support the most vulnerable members of society. With increasingly pressured budgets, many Local Authorities want diversify their income streams to include SIBs, but common problems such as long timescales and complexity can prevent access to investment capital. However, with a focus on local authority commissioners and the experience built up by EBSI, Triodos believes that these barriers can be overcome.
EBSI was established by Roger Bullen in 2015, and over the past 18 months has successfully worked with a number of local authority commissioners to develop and deliver outcomes based commissioning contracts funded through social investment. However, as a small start-up entering a challenging market place, EBSI Ltd ultimately encountered longer than expected delays in closing transactions and in October 2016 ran out of funding and entered into a creditors' voluntary liquidation.
The company's largest creditor was Big Society Capital who had provided £475,000 of start-up capital in the form of equity and loans. Big Society Capital consented to the deal in order to support conversion of the EBSI pipeline and develop the market.
The EBSI client projects will be taken into Triodos Corporate Finance - a division of the bank which specialises in raising risk capital for clients in the social and environmental sectors, and a recognised leader in development of SIBs. EBSI CEO Roger Bullen joins Triodos Corporate Finance as Lead - Commissioner Advisory Services. As a commissioner with Essex County Council, Roger established the UK's first social impact bond for children in and at the edge of care in 2012.
Dan Hird, Head of Corporate Finance at Triodos Bank UK, said: "Triodos Bank has a strong track record developing social impact bonds that address challenging social issues in the UK like homelessness and youth employment. Our experience tells us that a flexible approach that's focussed on the local authority commissioner can add much more value and that's exactly what EBSI adds to our team."
"We are excited to welcome Roger Bullen to Triodos and look forward to combining his experience with ours, helping us realise the potential with current EBSI clients and in the wider market."
Cliff Prior, CEO of Big Society Capital, said: "We are delighted that Triodos, with their expertise in developing SIBs, have taken up this opportunity. While it's always disappointing to lose a good organisation, it's great news that the pipeline of EBSI's deals will remain, skills will be transferred and no vulnerable people will have lost a service."
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About Triodos Bank
Triodos Bank is a global pioneer in sustainable banking using the power of finance to invest in projects that are good for people and the planet. Triodos uses its €12 billion in assets to create social, environmental and cultural value in a transparent and sustainable way.
With UK operations based in Bristol, Triodos Bank has branches in the Netherlands, Belgium, Spain, Germany and an agency in France. Globally, Triodos Bank has microfinance projects in Central Asia and Eastern Europe, and is a founding member of the Global Alliance for Banking on Values (GABV), a worldwide network of 36 banks seeking to transform finance into a vehicle of positive influence.
Triodos Bank N.V. has a full banking license and is registered with The Nederlandsche Bank N.V. (the Dutch central bank) and The Netherlands Authority for the Financial Markets.
About Big Society Capital
Big Society Capital is a financial institution with a social mission, set up to build the social investment market in the UK, so that charities and social enterprises can access appropriate repayable finance to enable them to grow, become more sustainable and increase their impact on society. It is doing this by building a diverse social investment market: encouraging investors to lend or invest money to achieve a social as well as a financial return.
Since it was set up as an independent organisation in 2012, Big Society Capital has invested, along with its co-investors, over £285 million in specialist organisations who lend to charities and social enterprises.