Connecting communities to capital Connecting capital to change Social Investment

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Connecting communities to capitalConnecting
capital to changeSocial Investment Social
Stock Exchanges as models for financing social
enterprise
8th October 2009 Tamzin Ractliffe
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The nature of an exchange matching demand and
supply
SUPPLY
DEMAND
A MARKET
Widgets, gadgets other essential high
demand consumer products!!
Relatively Sophisticated investment sector Good
regulatory capacity Openness to policy reform
National Pension and Insurance Fund Assets
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Why not also for social investments?
SUPPLY
DEMAND
A MARKET
Socio-economic backlog!
Relatively Sophisticated investment sector Good
regulatory capacity Openness to policy reform
National Pension and Insurance Fund Assets
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The South African Social Investment Exchange
(SASIX) pre-SSE platform

• A social investment exchange, listing evaluated
  projects in priority development sectors
• Rigorous due diligence process involving
  intensive assessment, evaluation and reporting
• Measures impact in terms of life-change across
  quantitative and qualitative variables
• Hybrid Investment provide a mix of social and
  financial returns
• Continuum of qualified, structured investment
  opportunities delivering measurable impacts on
  poverty and a range of financial returns from
  the pure philanthropic donation to market
  SASIX Social to SASIX Financial
• Social enterprises will require equity finance as
  they evolve and we need to develop the
  infrastructure to enable that

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Benefits of exchange models for social enterprise
finance

• reduce transaction costs for investors and
  beneficiaries
• improve standards for due diligence,
  opportunity/risk assessment, impact reporting and
  monitoring
• increase transparency and accountability
• high touch direct relationship
• provides access to alternative financing
  mechanisms
• provides entry / exit mechanism for investors
• increases liquidity
• ensures primacy of social mission protects
  mission drift

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SASIX investment continuum
Principal return
Social return only
Social Financial returns
Market returnswith social impact
Grants
Debt financing
Private Equity
Microfinance
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Extended SASIX SSE continuum
JSEAlt XSocial X?
Market returnswith social impact
Equity
Principal return
Social Environmental Exchange
Social return only
Social Financial returns
Grants
Debt financing
Private Equity
Microfinance
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Global Federation of Social Investment Exchanges
(GSIX) is

• A nonprofit, multi-stakeholder association of
  social investment exchanges, social enterprises,
  social and financial analysts, brokers, impact
  investors, and financial intermediaries, GSIX
  aims to provide the social capital market
  ecosystem with a member-run global body to
• guide grow global support for accredited
  issuers and intermediaries
• support in-country efforts to develop social
  investment and social stock exchanges and so
  build access to the global impact investment
  market
• set, monitor and disseminate standards for
  impact
• be a voice to policy makers, the media, and the
  public on the power, range, and results of the
  social economy
• be a key deliberating body on regulations and
  transnational social investment
• capital raising marketing services through
  regulated alternative trading systems and
  registered broker dealers (NeXii)