The £600 million bank, which has been rebadged as the Big Society Capital Group, has also made a maiden investment – a £1million backing of the Private Equity Foundation. The foundation aims to help disadvantaged young people into employment and training.
Cameron has pledged to inject ‘significant resources and financial innovation’ into UK social enterprises through Big Society Capital as part of his wider and controversial Big Society initiative.
About £400 million of the fund will be financed through unclaimed assets left dormant in bank accounts for more than 15 years, with the remaining £200 million coming from the big four banks: HSBC, Lloyds Banking Group, Barclays and Royal Bank of Scotland.
Sir Ronald, who founded the private equity firm Apax Partners, will serve as the unpaid, interim chair of Big Society Capital Limited, the operating company of the group, until it is fully operational. Nick O’Donohoe, formerly global head of research at JP Morgan, will be the fund’s first chief executive.
According to a statement from Cabinet, the group will constitute three entities: the Big Society Trust, which is responsible for ensuring that the group is true to its mission; Big Society Capital Limited, which is the operating company of the group; and Big Society Foundation, which will be a charitable foundation able to receive philanthropic donations.
Further products such as Social Impact Bonds have been flagged for launch in the coming months.
Cameron says the group will ensure socially orientated financial organisations will have greater access to affordable capital.
He comments, ‘When I announced the idea of a Big Society Bank, I wanted to help social enterprises and other groups to grow and expand their vital work. I am delighted that with today’s announcement of the organisation’s first investment, this vision is becoming a reality. I’ve seen the amazing work that Britain’s social enterprises already do to tackle some of our country’s most intractable problems.’
Private Equity Foundation chief executive Shaks Ghosh comments, ‘This is incredible news enabling the Private Equity Foundation to help thousands more disadvantaged young people reach their full potential. We are proud to be the first investment as the Big Society Capital leads a new era of social investment in the voluntary sector.’
Applications for investment should be initially made to the Investment Committee, details of the fund and application process can be found on the Big Fund website.