Fund managers have been appointed in Newcastle to oversee a £9m pot of cash to drive forward North East social enterprises.
The North East Social Investment Company (NESIC) has appointed Northstar Ventures to manage the North East Social Investment Fund, which will invest in voluntary and community organisations and social enterprises in the region.
The aim of the fund is to invest to create social change with key areas being homelessness, debt and poverty, improvement in health and social care needs, mental health provision, offender rehabilitation, unemployment and regeneration of deprived communities.
NESIC will be overseen by a board of leading business figures and community and voluntary sector representatives and chaired by Andrew Mitchell, chief executive of North East Finance.
He said: “The board is delighted to have appointed Northstar Ventures to manage the fund, under the leadership of investment manager, Peter Gilson. Our objective is to stimulate the growth of the social investment sector in the region.
“Organisations in the community and voluntary sectors will be able to borrow money from the fund, which will be repayable over an agreed term and re-invested in other social enterprises in the future.”
The North East Social Investment Fund was the brainchild of Northern Rock Foundation and Big Society Capital (BSC) and is the first regional fund of its kind in England to be set up with support from BSC.
Nick O’Donohoe, chief executive of Big Society Capital, said: “We are very pleased to see the North East Social Investment Fund in operation.
“This will provide an independent, sustainable and long lasting social investment facility that will catalyse enterprise, innovation and growth in the voluntary, community and social enterprise sectors in the North East.”
Big Society Capital has invested £5.25m in the fund, Northern Rock Foundation has committed £3m and The Esmée Fairbairn Foundation has committed £750,000.
The fund is also on the lookout for further investors to grow its size to a maximum of £11.5m with up to £1.25m of additional funding from available BSC to match the funding from new investors.
Alastair Balls, chairman of Northern Rock Foundation, said: “This is an opportunity to create a seismic shift in the funding landscape of the voluntary, community and social enterprise sector in the region.
“This fund has a 20 year life and is part of The Foundation’s legacy to the region.”
Caroline Mason, Esmee Fairbairn Foundation Chief Executive said “We hope that this fund can unlock and enable the potential of people and ideas to re-design and challenge existing business, finance and service delivery models.”
The North East LEP helped to fund the initial research and believe it has the potential to have a real, lasting impact across the region. It is part of the legacy being established by Northern Rock Foundation and we applaud its leadership of the scheme.”
Tees Valley Local Enterprise Partnership has also welcomed the initiative.
Stephen Catchpole, chief executive, added: “We look forward to seeing the new fund stimulate social investment here in the Tees Valley.”