Bridges raises£155m for investment in impact-driven businesses
Bridges Fund Management (“Bridges”) has raised £155m of capital to invest in impactful growth businesses and mission-led enterprises, following the close of its latest growth fund and a number of managed accounts.
Over the last two years, Bridges has been re-shaping its investment platform in response to demand from impact-driven entrepreneurs seeking different kinds of capital, and from investors seeking a broader range of ways to invest for impact. It has raised just over £50m to date for Bridges Evergreen Holdings, a pioneering permanent capital vehicle. It has now also closed Bridges Sustainable Growth Fund IV (SGF IV), a traditional closed-end private equity fund, with c.£80m of commitments, and raised a further £25m through separate account arrangements with a number of UK pension funds.
SGF IV will take majority stakes in exciting growth businesses that are helping to tackle our biggest social and environmental challenges, helping these companies to accelerate their growth and optimise their impact. It has already made three investments: Just Ask, a facilities management business that works exclusively with Housing Associations, whose focus on social value and improving the lives of residents is helping it to win new contracts; and Innovate and Cucina, two specialist providers of high-quality school catering, who have now joined forces to create The Impact Food Group.
Evergreen has a more flexible mandate, enabling it to take either majority or minority stakes and to support a range of mission-driven enterprises over a longer time period than standard private equity allows. It is structured as a holding company rather than as a fund, with a focus on delivering an attractive financial yield to investors as well as strong social and environmental impact. It has made three investments to date: in Shaw Healthcare, the UK’s largest employee-owned care business; New Reflexions, a specialist operator of children’s centres; and The Ethical Housing Company, a new venture to create a portfolio of quality affordable homes for rent in the North-East.
Philip Newborough, CEO of Bridges Fund Management, said: “We are excited to have a broader range of tools with which to back enterprises that can change the world for the better. Our world faces huge social and environmental challenges, like climate change, the ageing population and the rise in chronic health conditions. For too long, business has been part of the problem. But we’re now seeing a new generation of mission-driven entrepreneurs emerge that want to be part of the solution – partly because they want to have a positive impact on the world, and partly because they recognise that responding to these unmet needs represents a huge growth opportunity. In the new economy, these are the organisations that people want to buy from and work for.
“Despite the uncertainty around Brexit, we’re confident the UK will continue to be one of the best places in the world to start and grow this kind of enterprise. So we’re excited about partnering with more ambitious, mission-driven management teams over the next few years, providing them with the flexible, values-aligned capital they need to get to the next level.”
Bridges has specialised in sustainable and impact investment since 2002. Across its platform of funds – which also covers property and social outcomes contracts – it has now raised over £1bn for impactful investments.
Bridges is also committed to supporting the growth of this market, particularly through the work of Bridges Insights, its field-building arm, which is currently facilitating The Impact Management Project.