Social Impact Fund Hosting

Social Impact Funds

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Social Impact Funds are funds which has been created with a specific purpose of responsible and sustainable investing – for example, investing ethically in the greater good, rather than profit alone.  

Whilst the intentions of Social Impact funds are positive for the wider community, Social Impact funds are heavily regulated in the UK and Europe.  Any fund seen to be promoted or operating, must adhere to the AIFMD regime.  Generally, the most cost-effective option is to outsource this function to someone like XCAP who use Vantage Point Capital as the AIFM platform.  This allows you to focus on deal origination, execution, value creation – rather than spend time and resources on non-core activities. 

As specialists in our field, we have the platform, infrastructure and technical know-how to ensure your fund has the regulatory cover required, offering an ongoing oversight as part of our services.  By outsourcing your non-core activities is hugely cost effective, than seeking direct authorisation and apply for an AIFM. 

Growth Strategies of Social Impact Funds

The investment culture globally has shifted from 2012/13 in providing shareholder value, but doing so in a way that embraces an economic upside for all parties concerned.  This in turn, makes the investment funds particularly attractive to charities, pension funds, insurers and central governments/municipals to invest in.

It should be noted that the UK are the pioneers in the structuring and launching of such schemes, particularly with the creation of ‘Big Society Capital’ which is seen to be as a real catalyst in social impact funds. 

Holding Strategies

The holding strategy of a social impact fund is generally no different to PE/VC funds in that they are closed entity with a general life span of 5 years.  Returns are also closed aligned to PE/VC funds – making social impact funds a creditable investment selection for investors (including conventional funds) seeking to diversify investments into ethically and socially responsible funds.

Growth of social impact investing is similar to ESG investing (environmental, social and governance), where the market has been billions of dollars deployed into such funds. 

The UK launched a specialist institute in 2019, Impact Investing Institute which is a not-for-profit organisation which aims to accelerate growth in the impact investing market place.

Social Impact Funds - Why XCAP?

Unlike other regulatory hosting platforms and European AIFM platforms, we specialise in structuring, launching and hosting social impact funds under the AIFMD regime.  Rather than be a generalist regulatory hosting platform, we offer bespoke services to social impact funds, complete with integrated solutions such as risk management, investment due diligence, corporate finance advisory, custodians, fund administrators and legal support where required. 

By being a true specialist, allows us to add genuine value to our social impact fund clients, from a Corporate Finance / capital raising point of view, to offering assistance in managing risk and compliance. 

XCAP and Vantage Point Capital (our regulated investment manager and European AIFM) are members of the British Venture Capital Association (BVCA) and UK Business Angels Association. 

Social Impact Funds - How XCAP can help

Whether you are a seasoned professional in social impact funds, or looking to launch your first fund – we offer a comprehensive platform for social impact funds that will allow you to ‘Plug and Play’ your fund, from structuring, fund memorandum, launching, risk management, regulatory cover and capital raising. 

Our service include, but not limited to;

  • Competitive and flexible pricing, specifically for Social Impact Funds
  • Fund Structuring & Set Up, including EuVECA Funds
  • Fund Memorandum
  • Legal Counsel/Support on Taxation, Investment Management Agreements and corporate structures for the General Partner (GP).
  • Integrated Fund Administration & Auditing
  • Custodians
  • FCA Regulatory Hosting (FCA Appointed Representative)
  • European AIFM/ManCo Hosting for the Fund
  • European Passporting to all 29 EEA States
  • Corporate Finance & Capital Raising
  • Risk Management / External Risk Committee

Social Impact Fund Launch

As one of the fastest growing sectors of interests in the alternative asset space, it is anticipated that the social impact fund market will quadruple in grow over the next 10 years, as more institutional and professional investors take an ethical and strategic review to invest, at least in part into social impact funds.   

The number of social impact funds have increased in the UK and Europe – giving investors and conventional funds a broader selection in ethically investing.  With demand from investors continuing to grow, social impact funds have been earmarked to be one of the fastest growing asset classes over the next five years.