The Joint Investment Committee for the Growth Fund met on the afternoon of 17 September. As you may remember from my blog in June, we had asked for applicants seeking a larger investment (including a grant element at or near the £3m maximum) to come forward by the end of August. We only plan to make a few larger grants and so we are keen to see these applications all together.
We received two further large applications by the end of August and these were reviewed by the JIC on 17th September at Round One (the two stage process is outlined here). One large application had already been received and agreed at Round One in June, had already completed the due diligence process, and so was ready for a Round Two decision by the JIC at this meeting. We therefore had three large applications to review together at the meeting, each with a grant request of more than £2.7m and with a total combined loan and grant ask of £18.5m.
Of the Round One applications, one will proceed on to due diligence and one was declined but invited to reapply in a partnership.
The Round Two application was approved – but don’t get too excited, this is where the hard work of developing the legal agreements begins. This will take a bit of time, especially as it’s the first time we have done it. We will be making an announcement once those legal documents are signed.
Overall the status of applications to the Growth Fund currently looks like this:
- Eligible expressions of interest invited to apply: 11
- Applications received: 6
- Applications approved at Round One: 4 (three are now in due diligence)
- Applications declined at Round One: 2
- Applications approved at Round Two: 1 (now in the process drawing up legal agreement)
Some clear themes are starting to emerge from the applications which the JIC has approved at the various stages. These include: strong connectedness to the voluntary sector and the ability to reach organisations who have not benefitted from social investment to date; a clear understanding of demand for loans from those organisations; a focus on developing a new offering – this may be offering smaller loans than previously possible; clear operating costs and effective use of the subsidy; and social impact being embedded in the decision making and monitoring processes.
The JIC also discussed how the whole portfolio for the Growth Fund might evolve so we can build more of a sense of how we will make investments over the next year(s), and how best we can support new partners to develop a lending process (we have been building a page for partners to find each other here).
The next meeting is on 19 October.