finance
profile: BIGinvest
profile: BIGinvest
Thinking BIG when
it comes to finance
Spawned by street newspaper The Big Issue, the BIGinvest loan fund takes a hands-on approach to the enterprises it backs. And that’s just the way they like it! Finola Robinson reports
Barnardo’s is a leading children’s charity which is developing social enterprises that employ people from their homes and help create unrestricted income. BIGinvest’s experience as social entrepreneur and financier formed the basis of the partnership: assisting a traditional charity to enter the sector and develop new social enterprises.
around the world, and this idea – that buying natural mineral water sourced from the Black Mountains in Wales can give muchneeded water to parched villages in the developing world – has made a big splash with consumers. Belu donates all its profits to fund clean water projects around the world. As its first water project, Belu is installing wells and hand pumps for 10,000 people in a village in Tamil Nadu, India. Every bottle of Belu a customer drinks provides clean water to one person in Africa or India for one month. You don’t often hear about better incentives for buying water than that. ‘But we could not have done it without BIGinvest’s willingness to lend to us,’ says Paget. ‘Because we are not-for-profit, we didn’t have back-end support from the commercial sector and getting the funds to grow the company was the hardest part of all. But BIGinvest gave us so much more than that. In addition to the contacts, they gave us assistance right across the board in sales, marketing and financial management. As I say, they were our lifesavers.’ From Belu’s inception, Paget wanted the water to be sold in the biodegradable bottle that is gaining attention as its unique selling point. ‘We wanted to sell our water in a compostable bottle and to be carbon neutral, ‘he says, ‘but we would not have been able to achieve these two things without BIGinvest’s support. Out of 70,000 products stocked in Tesco, ours is the only one that comes from a company with a 0% carbon footprint
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18 socialenterprise april07
Barnardo’s
Belu Belu is the first bottled water company in the UK to use compostable bottles made from corn, and sells the first bottled water that doesn’t contribute to climate change. It donates all its profits to fund clean water projects around the world. Its water can be found in major supermarkets.
Hackney Community Transport (HCT) HCT is an award-winning Community Interest Company and a fast-growing provider of public transport and related training services. BIGinvest made a loan to support the expansion of 15 school bus routes in Yorkshire. CT Plus, a subsidiary of HCT, carries over 700 students to school each day.
One Earth One Earth is a not-for-profit agency set up to engage people in socially and environmentally responsible trade and living. With support from BIGinvest, One Earth created Climate Change Now, a unique tool to enable customers to switch to renewable energy suppliers online via www.climatechangenow.com.
Pines Calyx A state-of-the-art environmentally sustainable conference centre in an Area of Outstanding Natural Beauty near Dover. The centre works in harmony with nature and is built from recycled materials using groundbreaking architecture and engineering.
Pontin Charitable Trust Set up by John Pontin, the Pontin Charitable Trust is a trust fund based in Bristol that supports charities and groups in the South West of England focusing on environmental issues. The BIGinvest loan gave the trust the working capital to lend to groups working on renewable energy.
RMS Locotec RMS Locotec is a community transport company that hires out shunting locomotives and offers track maintenance and engineering work. A loan from BIGinvest gave RMS the capital to purchase shunting engines and develop the infrastructure of two railway lines. RMS Locotec is a subsidiary of Ealing Community Transport (ECT).
SCA Healthcare
Nigel Kershaw, chief executive of BIGinvest : ‘We have created a real pool of financial expertise around the social drive.’
PHOTO: ANTHONY EPES PHOTOGRAPHY WWW.ANTHONYEPES.COM
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t takes Reed Paget, managing director of Belu Water, just a few words and not a moment’s hesitation to sum up his experience of BIGinvest, the sustainable loan fund founded by The Big Issue and a clutch of pioneering social entrepreneurs. ‘They were our lifesavers,’ he enthuses, without missing a beat. In 2007, BIGInvest is increasing its total lending from £3.5m to £5m and is on the lookout for partner social enterprises that need investment of between £50,000 and £500,000. And what makes it unique, according to chief executive Nigel Kershaw, is that the people that make up BIGinvest have the skills and expertise to offer so much more than just the loan. Take Belu’s trajectory as a case in point. A year ago, Belu Water had a staff of two and a modest annual turnover of £150,000. But in 2007 it boasts an impressive £1.8m turnover, product presence in 32 Waitrose stores around the UK and a legion of fans. Plus, it is the only water on the market to be sold in a biodegradable, compostable bottle made from corn. If that wasn’t enough, Belu is positioned against a larger, more global backdrop: those who stand to gain from the sales are not the Belu directors, shareholders or trustees but poor and marginalised people around the world who will gain access to clean water as a direct result of Belu’s partnership with WaterAid. From the outset, Paget pledged to use 100% of profits to fund clean water projects
Who’s been helped by BIGinvest?
SCA Healthcare was established by leading care provider SCA Community Care to meet the need for better dental healthcare provision. SCA Community Care holds 45 NHS contracts for the delivery of domiciliary care, day care and transport services for older people and people with disabilities. BIGinvest financed two of a chain of five SCA Healthcare Dental Surgeries serving disadvantaged inner-city communities on the south coast. SCA is planning to roll out this model across the south of England.
Thorpete Gas Services Ltd Thorpete provides gas and electrical installation and maintenance services to public and private sector customers, but primarily to housing associations in the East Midlands. The business is run as a social enterprise providing job and training opportunities for long-term unemployed local people. BIGinvest financed the upgrade of Thorpete’s customer service IT system.
Venture Partnership Foundation The Venture Partnership Foundation is a philanthropic fund management group and the UK’s first registered grant-making charity that is mutually owned by its supporters. BIGinvest has helped the Venture Partnership Foundation to finance grant and loan packages for growing social enterprises and entrepreneurial charities. april07 socialenterprise 19
finance profile: BIGinvest
simply and in real terms, such as the fact that 3,500 kids go to school every day on a BIGinvest bus [through another one of its loan recipients, the award-winning community transport social enterprise HCT]. I’ve made it my policy that, for the time being, I’ll talk to everyone who phones to enquire about a loan.’ Kershaw is proud of the team with whom he works and attributes much of BIGinvest’s success to their pioneering work. ‘We have created a real pool of financial expertise around the social drive,’ he says. ‘All of the people involved, including John Bird, Gordon
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and that isn’t contributing to global BIGinvest has helped a warming.’ wide range of enterpri ses, He adds: from gas maintenan ce to ‘We can’t dentistry and bottle d water pretend success in this marketplace is going to be easy, but the consumer seems to really like our product so we’re now aiming for a ten-fold growth.’ Coincidentally, at BIGinvest, chief executive Nigel Kershaw is also focusing on the package – but not one made from corn. For him, BIGinvest’s strength rests on the fact that social enterprises coming to the organisation for a loan get the whole package – funding, but also, and sometimes more crucially, experience and guidance. He explains: ‘What is unique about BIGinvest is that it was founded by social entrepreneurs. We are an entrepreneurial start-up ourselves and we’ve got this culture of being a social enterprise. We’re not a charity, we’re not a foundation – we are a business solution to a social crisis – and that distinction is incredibly important. But the thing is that so many people don’t really understand what social enterprise is all about at the moment so we have to explain everything 20 socialenterprise april07
Roddick, Sarah Forster and Puchka Sahay Direnzo, have also been involved in social enterprises for so long we really look at the loans from the perspective of the user rather than
the lender. We feel that we are there to create social change and social opportunity. That is what is so unique about BIGinvest – we are able to look at really creative ways of investing and lending money.’ This crack team means that BIGinvest can advise social enterprises how to develop innovative finance, helping them to grow and expand their services to promote long-term social, environmental and financial inclusion. Through its UK-wide remit, internal underwriting and technical expertise, partnerships and network, BIGinvest is in a unique position to act as a catalyst, broker, financier and technical assistance partner. Over the past 18 months, BIGinvest has built up a track record in providing equity-like investment to social enterprises delivering blended financial and social returns. BIGinvest has developed a range of products tailored to the needs and structure of social Sarah Forster, enterprises. And borrowing from BIGinvest director. Founder itself helps create further social opportunity of Geoeconomics, as dividends can only be paid to The Big with a background Issue. It is not surprising that the team have in international found a high demand for their products economic – they have built an extensive portfolio of development, enterprises in a short period. The ventures microfinance financed include some of the country’s bestand enterprise, known social businesses, such as Jamie Forster previously Oliver’s Fifteen, SCA Healthcare, Belu and worked for the Thorpete. New Economics For Kershaw, another moment of Foundation and the clarity followed a seemingly ordinary chat World Bank. with Gerry Higgins, former boss of Social Firms UK and now in charge at Community Puchka Sahay Enterprise Strathclyde. They were discussing Direnzo, adviser, how Social Firms Australia had just bought loans and out a bonsai tree wholesaler. ‘Social Firms investments. Direnzo joined were using the bonsai trees to help get disabled people back into employment and BIGinvest with a 14-year it was like a eureka moment for me. The idea occurred to me that we could set up a track record in fund for people starting social enterprises financial services, and I thought why don’t we also go and including serving buy businesses and turn them into social as a vice-president enterprises?’ From this idea the BIGinvest in ShoreBank’s Buy-Out Fund was born. Commercial And for the future? The plan is to grow Banking division in Chicago. She spent the existing loan fund into a £10m Special her early career as Venture Fund providing tailored long-term debt, quasi-equity and equity finance to earlyan entrepreneur stage and growth entrepreneurs. Nigel hopes in the private and to see financial returns of 4-6% but is keeping non-profit sectors his eye firmly on the end result – namely, and as a strategy the positive benefits the funds will bring to consultant for disadvantaged people and the environment. a development finance consultancy As always, he is keeping his eye on the big in the USA. picture. Watch this space. ● The BIGinvest team
Nigel Kershaw, chief executive. Kershaw is chairman of The Big Issue, where he has been responsible for its publishing operations, as well as developing new businesses. He has founded a number of social businesses and serves on the board of the Social Enterprise Coalition.