A group of UK fund management firms is to launch a platform for impact funds that aims to raise an initial £3 billion (€3.36 billion) of assets under management from retail investors.
The firms, led by Aberdeen Standard Investments and including Columbia Threadneedle Investments and AllianceBernstein, are partnering with The Big Issue Group, an organisation that sells the eponymous magazine to help the homeless.
Aberdeen Standard said the “revolutionary mobile-first investment platform” will bring a wide range of social and environmental impact funds direct to a retail audience for the first time.
£1 million of founder capital has been pledged and up to 12 founder firms will have exclusive rights in the first year to market impact funds on the platform.
The impact platform is called The Big Funds and the wider project, which includes making ethical finance more available, is called The Big Exchange.
Campbell Fleming, Aberdeen Standard’s global distribution head, originally proposed the idea in November 2017. He said: “We are close to closing our initial round, thanks to an overwhelming level of interest and support from the investment industry.”
Fund manager Alquity is another founder confirmed for the launch – which is expected in early 2019 - and tech platform builder FNZ and specialist marketing agency AML Group are also involved.
Emma Bickerstaffe, a former HSBC UK head of strategy, leads the launch team. “The aim is to offer 30-40 quality impact funds via the platform from day one. Over the first five years we believe The Big Exchange will become the go-to platform for retail impact investors and attract around £3 billion of assets,” she said.
The team has developed the platform to user testing stage with a beta version to be launched early in 2019.
Funds will be offered at a price which will be “amongst the lowest in the market” and the platform will allow investors to select their preferred area of impact, matched to the UN’s Sustainable Development Goals, and their preferred risk appetite.
Fleming said the impact platform is the first phase of a project that will make wider ethical financial services available through a mobile interface. The overall objective is a complete blockchain-based ecosystem that works for everyone, he said.
Paul Robinson, chairman and founder of Alquity, said: “How we choose to spend our money is more powerful than we think. This is particularly true for investment; how we deploy our investment capital shapes our societies. The Big Exchange empowers those who crave a better and fairer future by allowing them direct and affordable access great responsible investment opportunities.”
Nigel Kershaw OBE, chairman of The Big Exchange and The Big Issue Group, said: “The Big Exchange follows exactly the same principles as The Big Issue and its co-founder Lord John Bird of a hand up, not a hand out. A mission-driven business that is more effective and sustainable because it’s not a charity. It will help millions of people to help each other build a better society. That’s huge.”
Other firms involved are Fimatix, Trowers & Hamlin, Herbert Smith Freehills, 3D Investing and FNZ's regulated affiliate Rexigon Securities, which will provide execution and custody.
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