Schroders appoints BSC for social impact trust launch

The Schroders BSC Social Impact trust will aim to provide a NAV return of CIP plus 2% per annum

Schroders is attempting to raise £100m for a social impact investment trust managed by Big Society Capital (BSC) that it is hoped will grow to between £300m and £500m within five years.

The Schroders BSC Social Impact trust will look to deliver measureable positive social impact by investing in a diversified portfolio of private market impact funds, co-investments alongside impact investors and direct investments into private market social impact funds.

It will aim to provide a net asset value (NAV) return of CIP plus 2% per annum, averaged over a rolling three- to five-year period, once the portfolio is fully invested.

The mandate will have no distribution target, but will aim to pay out its income generated as required, which is expected to vary over time and the yield is likely to be around 1% to 2%.

Chair Susannah Nicklin said the trust comes to market "at a time when the UK is facing some significant headwinds, particularly on social issues".

The offering would "bring together a diverse team of investment professionals with experience in portfolio management, sustainability, impact investing, government policy and social enterprises", Nicklin added.

Our intention with this trust is to provide investors and the investment sector with a best-in-class impact trust, Nicklin said.

Global head of sustainability at Schroders Andy Howard noted a deepening connection across financial markets between impact and investment, adding that Schroders had been "focused on the implications of that shift across our entire business, and on meeting the changing demands of our clients".

He continued: It is clear that our clients are looking for new ways to connect their investment goals and sustainability concerns to produce measurable social impact as well as a financial return.

These investments are anticipated to be long term, low volatility and have low correlation to equity market movements, he said.

BSC runs a number of social impact funds for private markets and has a track-record in delivering sustainable financial returns and positive impact on people's lives in the UK.