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Many social enterprises aren’t investment ready, Triodos warns government

30 September 2010

'Despite having closed this particular fund, we firmly believe there is a place for this type of investment in social enterprises, but the social enterprises and their management teams need to get themselves ready for it'

 

Triodos Bank managing director of investment banking, James Vaccaro

Social financier Triodos Bank has called on the government to learn the lessons of its closed equity fund and put money into helping social enterprises become investment ready.

The £3m Triodos fund set up to invest equity venture capital in social enterprises closed after one £320,000 deal.

In an exclusive comment for Social Enterprise, Triodos Bank managing director of investment banking, James Vaccaro, said the team looked at hundreds of proposals but many of the business models were too weak for equity investment.

Vaccaro said: ‘Despite having closed this particular fund, we firmly believe there is a place for this type of investment in social enterprises, but the social enterprises and their management teams need to get themselves ready for it.’

He said that in developing the Big Society Bank Triodos hoped the new government would take on board the lessons learnt from the fund.

Vaccaro also said that it took a lot of time to work out the right investment structure and experimentation was needed. He added that reasonable rates of return from investments in social enterprises could be expected – but it would be less than market rates.

To read the full comment click here.

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