As part of a £3.1 million package of investments announced by the Big Society Investment Fund (BSIF) at the end of December 2011, the Social Stock Exchange (SSE), based in London, will receive £850,000 to develop a securities exchange, a social stock exchange and a secondary business, the Early Stage Investment Exchange (ESIE), to build a pool of equity investment-ready social enterprises for initial public offering (IPO).
The SSE, seen by many as fundamental to creating a thriving social investment marketplace which will provide investment to social enterprises wishing to scale up, began in 2008 with a £252,000 Rockefeller Foundation grant to fund a feasibility study. Following this the SSE was formed, led by Pradeep Jethi, a former new product development manager at the London Stock Exchange, and Mark Campanale, a former fund manager.
Although the Cabinet Office claims in its press release that it is the world’s first social stock exchange, it is predated by the Bolsa de Valores Sociais (BVS) in Brazil (although this is strictly speaking more of a philanthropic giving platform), Impact Investment Exchange Asia (IIX) in Singapore and, most recently, iX in Mauritius.
BSIF was set up by the Big Lottery Fund, using money from dormant bank accounts, to make investments prior to the establishment of Big Society Capital (previously known as the Big Society Bank). Other beneficiaries of the BSIF investments are FranchisingWorks, which will receive £1 million to help long-term unemployed people to set up their own franchise business; Triodos Bank, which will use its £500,000 investment to fund a payment-by-results initiative to improve educational, training and work outcomes for vulnerable young people in Merseyside; and Community Generation Fund, which will receive £750,000 to set up an initiative to create community-owned social enterprises in deprived communities which offer affordable, green energy.
Cabinet Office News Release, 28 December 2011