Barclays puts up £5m to back ethical investment fund
Thursday 17 January 2008
Barclays is putting its support behind a pioneering social investment fund which aims to deliver healthy returns to investors while concentrating on the burgeoning ethical business sector.
The bank will invest £5m into a £25m social investment fund managed by Catalyst Fund Management & Research which aims to discover and develop successful businesses that also have a strong ethical agenda.
The key difference with other socially responsible investment (SRI) funds is that Catalyst will put money into private firms rather than publicly listed companies. It aims to invest between £500,000 and £4m and will only target companies that are already generating a profit.
Barclays' chief executive John Varley said: "We are excited by the potential of this innovative fund. Both the financial returns we anticipate and the opportunity to increase our presence in these rapidly growing sectors make this an attractive proposition for the bank.
"The fund's ambitions are also consistent with our corporate values. Our previous ventures in social investment funds have proved that it is possible to invest in socially viable projects and still make significant returns."
Barclays has previously invested in Bridges CDV Fund II, a Government-backed £75m venture capital fund which invests in the most deprived 25 per cent of areas in the country.
Rodney Schwartz, Catalyst's founder, said the new fund is the next logical step to the Bridges fund. "The ethical consumerism sector is just starting to hot up," he said. "Five or six years ago people were fixed on the idea that social businesses were somehow less profitable but this is no longer the case. There are businesses that are amazingly successful but also generate social returns. Anita Roddick proved this was possible at The Body Shop—now we need to find the next few examples. There has been a sea change in attitude."
Mr Schwartz added that the fund's target sectors were all growing faster than the UK economy. BigInvest, the investment arm of The Big Issue will be a partner in the fund while law firm Clifford Chance is providing support.
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