How social impact investing is playing out in Canada
Note: This post originally appeared in The Financial Post.
While much of social impact investing is occurring in other parts of the world, most notably the U.K., a number of moves are underway in Canada.
One such innovation is the Social Venture Connexion, which was set up almost two years back. Part of the MaRS Discovery District, SVX and defines itself as “a local, impact-first platform connecting social ventures, impact funds and impact investors to catalyze new debt and equity investment capital for local ventures that have demonstrable social and/or environmental impact, including not-for-profits, co-operatives and for-profit corporations.”
SVX works in close collaboration with the TMX Group Inc., and is supported by among others, the Government of Ontario, Torys LLP, and Imagine Canada.
Tim Jackson, a former venture capitalist fund manager who is Canada’s sector representative to the G8 Social Impact Investment Taskforce, and lead at MaRS Centre of Impact Investing, said SVX has raised $3.5 million for 28 ventures since its launch September 2013. One of those investments is SolarShare, a co-op that operates in the Toronto area.
Jackson said that SVX is a full-service platform that connects impact ventures with accredited investors. Recently SVX was implemented in Quebec, and has since been licensed by the State of California.
Another MaRS-related initiative is through Virgin Unite Canada, an organization associated with Sir Richard Branson. Virgin Unite will invest $1 million in a new social impact fund managed by MaRS. The fund is now seeking additional capital and hopes to start investing in early seed stage companies by the end of the year, says Jackson who estimates there are about 45 such funds in Canada.
But Jackson is keen to expand the potential of the market: his current project is calling on foundations and pension plans “to be more proactive in leading impact investment initiatives.” Currently foundations, which are required to direct 3.5% per cent of their assets to grants, to divert at least 10 per cent of their overall portfolios to impact investing by 2020. “This kind of call-to-action could divert millions of dollars to social programs in the future,” adds Jackson.