Portfolio in focus
Schroder BSC Social Impact Trust plcA diversified portfolio with demonstrable local social impact
The Schroder BSC Social Impact Trust invests in a diversified portfolio which we believe can deliver high social impact alongside good risk adjusted returns to investors, with low correlation to mainstream markets. Our portfolio spans across the UK with a focus on three primary areas.
High Impact Housing | Debt for Social Enterprises | Social Outcomes Contracts |
Social need: There is a chronic housing shortage in the UK. It’s estimated that £16.9 billion is needed every year for the next ten years to adequately respond to the chronic shortage of social and affordable housing. The housing crisis disproportionately affects those who are most disadvantaged in our society and those with additional care or support needs. | Social need: Shifts in public services and consumer behaviours create the need for new products, services and employment opportunities that may, alternatively, be delivered by impact-led social enterprises These social enterprises need capital to grow and traditional finance providers do not always understand how to address these financial needs. | Social need: Public services have traditionally been contracted in a prescribed method that is focused on payments for activities with mixed attention on desired outcomes and impact for people. |
Solution: SBSI invests in funds that provide homes for more vulnerable groups (those who have experienced homelessness or domestic abuse, or have additional support needs) and affordable housing for lower income groups supported by different government funding streams. | Solution: SBSI invests in funds and co-investments that provide capital to charities and social enterprises targeting high social impact interventions for more disadvantaged groups, primarily funded by government backed revenues. | Solution: SBSI invests in funds or direct opportunities that provide capital for expert charities and social enterprises to deliver outcomes-based government contracts. This funding enables social organisations to achieve greater impact for vulnerable people and provide better value for money for the public. Projects are paid for the social outcomes they achieve, with the value to government and society from savings (e.g. through early action to reduce the need for high cost care services) significantly exceeding the level of payments. |
What are social outcomes contracts?
Social Outcomes Contracts can improve the way public services are delivered, maximising the outcomes for people using these services. Payments are only made once outcomes have been achieved, so social investors will provide working capital for enterprises to deliver contracts – often serving the most vulnerable, or people with complex needs. The investors are only repaid if the contracts deliver measurable improvements to people’s lives.
Nation/Region
Outcome area
Asset Class
SDG
Key for the Index of Multiple Deprivation
- 5
- Most Deprived
- 4
- Deprived
- 3
- Average Deprivation
- 2
- Less Deprived
- 1
- Least Deprived
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What are the risks?
There can be no guarantee that the Company will achieve its investment objective or that investors will get back the amount of their original investment.
The Company has limited operating history and investors have a limited basis on which to evaluate the Company's ability to achieve its investment objective.
The Company has no employees and is reliant on the performance of third party service providers. Failure by the AIFM, the Portfolio Manager or any other third party service provider to perform in accordance with the terms of its appointment could have a material detrimental impact on the operation of the Company.
The financial performance of the Company will depend upon the financial performance of the underlying portfolio. The Company's portfolio will include Social Impact Investments over which the Company and Portfolio Manager have no control. In particular, investments in Impact Funds and certain Co-Investments will be managed by third party managers. The Company's performance and returns to Shareholders will depend on the performance of those Social Impact Investments and their managers.
The Company's objective is to deliver measurable positive social impact as well as long term capital growth and income and these dual aims will generally be given equal weighting. Social impact is the improvement of the life outcomes of beneficiaries in a specific target group or groups. There is no universally accepted definition of 'impact', an assessment of which requires value judgments to be made. The Company's impact focus may mean that the financial returns to Shareholders are lower than those which might be achieved by other investment products.
The Company depends on the diligence, skill, judgement and business contacts of the Portfolio Manager's investment professionals and the information and deal flow they generate, especially given the specialist nature of social impact investing. The departure of some or all of the Portfolio Manager's investment professionals could prevent the Company from achieving its investment objective.
The Company will make investments where the Company's commitment is called over time. Due to the nature of such investments, in the normal course of its activities the Company expects to have outstanding commitments in respect of Social Impact Investments that may be substantial relative to the Company's assets. The Company's ability to meet these commitments, when called, is dependent upon the Company having sufficient cash or liquid assets at the time, the receipt of cash distributions in respect of Investments (the timing and amount of which can be unpredictable) and the availability of the Company's borrowing facilities, if any.
The Company's investments may be illiquid and a sale may require the consent of other interested parties. Such investments may therefore be difficult to realise and to value. Such realisations may involve significant time and cost and/or result in realisations at levels below the value of such investments estimated by the Company.
Any change in the Company's tax status or in taxation legislation or practice generally could adversely affect the value of the investments held by the Company, or the Company's ability to provide returns to Shareholders, or alter the post-tax returns to Shareholders.