In March 2013, ABN AMRO launched the Social Impact Fund, a fund the bank is using to directly invest in social and sustainable enterprises. With this fund, ABN AMRO wants not only to be a player in the young and innovative market for social entrepreneurs, but also to contribute to its development. For the coming years a budget of €10 million is available for investments in Dutch social business activities. The amounts invested in each will vary from €250,000 to €1.5 million.
One year after the launch we look back on a successful first year and look forward to 2014. The manager of ABN AMRO’s Social Impact Fund Eric Buckens states: “We have already made a number of nice investments and we hope to expand on that figure in the next few years.”
Recently the Social Impact Fund invested in the SCOPEinsight concept. Supporting agriculture in developing countries, SCOPEinsight is a Dutch enterprise that provides business information on players in the farming sector of Africa, Latin America and Asia. They aspire to lower the bar for local credit suppliers to finance these businesses. Over 2013, the Social Impact Fund invested in two social enterprises. Nudge, an online consumer platform about sustainability, was the first company to be added to the portfolio. And later on ABN AMRO joined up with private parties to invest in Rotterdam start-up Buzinezzclub. They coach youngsters who are having trouble finding a job and help them start their own businesses. This greatly reduces the time that youngsters have to rely on unemployment benefits.
Contributing to society
Through the Social Impact Fund, ABN AMRO wants to contribute to social enterprises whose business models truly make a difference. Social enterprises are analysed thoroughly before they become eligible for inclusion in the portfolio of the Social Impact Fund. “We examine the social aspirations of the enterprise and the feasibility of that goal in their market. Before an enterprise receives any investment, it must have demonstrated to some extent that its goals are attainable, both socially and financially.” For the time being, only enterprises established in the Netherlands qualify for investment. Buckens: “That does not imply they cannot pursue social goals abroad - on the contrary.” In the future it will be decided whether non-Dutch enterprises will also rank for inclusion in the portfolio.
Buckens explains that developing the social impact market is one of the bank’s major priorities. “Of course we accomplish this by investing, but also by collaborating with other organisations. Together we look at how we can support enterprises - not just with capital, but also with advice,” says Buckens.
The success of the Social Impact Fund will decide whether or not clients will also be given the option to invest directly. ABN AMRO, Buckens says, is always keeping an eye out for ways to involve its clients in its initiatives - and share the gains with them. “The Social Impact Fund has a high risk profile. That means we must understand and control the risks before we can offer the fund to our clients as an investment opportunity.”