Allia launches social impact bond to public investment

The first social impact bond open to public investment has been introduced in the UK to help children aged between 11 and 16 to avoid going into care.

The Future for Children Bond, offered by Allia, a social investment charity, will finance Essex county council’s efforts to provide affordable housing.

The money will be loaned to property management company Places for People Homes, which builds, sells and rents homes and provides services and support for the occupants.

The council hopes home support will keep 100 young people out of care so that their prospects are improved and public spending is reduced.

The minimum investment is £15,000 ($23,000, €17,400) and amounts of more than £50,000 will be accepted only if the offer is not fully subscribed. The bond’s maximum figure is £1m.

The bond term is eight years, after which investors will regain their capital plus a variable return in proportion to income from the project.

The offer opened on February 4 and will close on March 15, or before if it is fully subscribed.

Tim Jones, Allia’s chief executive, said: “We’re seeing growing interest among investors in using their investment funds to achieve a social impact as well as providing a financial return.

“With the Future for Children Bond, investors can help give a better future to some of society’s most vulnerable young people, with the potential for sharing in the financial benefits, while also keeping their capital at very low risk.”