Agenda item

·         City of London Corporation Social Investment Fund – Proposed Management and Governance Arrangements

Report of the Town Clerk

·         City of London Corporation's Social Investment Fund (SIF): Proposal to invest in Oxfam/City of London Small Enterprise Impact Investing Fund (SEIIF)

Report of the Director of Economic Development and Chief Grants Officer, City Bridge Trust

The Committee considered two items of AOB as follows:

10.1 - City of London Corporation Social Investment Fund – Proposed Management and Governance Arrangements

The Committee considered a report of the Town Clerk on the proposed management and governance arrangements of the City of London Corporation Social Investment Fund.

RESOLVED: That authority be delegated to the Town Clerk, in consultation with the Chairman and Deputy Chairman, to approve the detailed arrangements for the management and governance of the Social Investment Fund. This would be subject to the approval of the Policy and Resources Committee and the Court of Common Council.

10.2 - City of London Corporation's Social Investment Fund: Proposal to invest in Oxfam/City of London Small Enterprise Impact Investing Fund

The Committee considered a report of the Director of Economic Development and Chief Grants Officer, City Bridge Trust on proposals to invest in the Oxfam/City of London Small Enterprise Impact Investing Fund (SEIIF).

The Chairman thanked Officers for the detailed report and for addressing the various questions he had posed, and endorsed the proposal to provide us $500,000 funding at the first subscription closing at 31 July 2012.

The Director of Economic Development noted that it would have been better to have the governance arrangements in place before proposing this investment but as it was for such a worthwhile cause it seemed appropriate to consider it at this time.

Members discussed the principle of using the first investment of the Social Investment Fund in a UK-based project. It was noted that the majority of the £20m Fund would be UK-based but 10% would be used for projects overseas, inclusive of this investment which would represent 1.6% of the £20m Fund.

Members highlighted the advantages for the City Corporation being a primary investor but it was noted that the terms of investment would not change if the investment was made in a future tranche. The Committee was generally supportive of the proposal, especially at the prospect of encouraging other investors at the second subscription stage in September 2012 but sought assurance that Oxfam were entering the agreement on the same terms as the City Corporation i.e. Oxfam were not on more favourable terms. The Chairman agreed that the City Corporation should be seeking terms equal to its co-investors.

Following a question, the Director of Economic Development confirmed that the target return to investors of 5% pa was after the 2% management fee had been deducted. Members felt that these fees may be a bit high but accepted them for the time being although sought assurance that the management fees would be reduced if the investment return was not achieved and suggested that Officers also consider any potential conflicts of interest in relation to ‘Symbiotics’ (the Fund Manager).

The Chairman noted that the Committee would like to be kept informed of the initiative, especially how it is performing against its return on investment target.

RESOLVED: That an investment of US $500,000 from the Social Investment Fund be made as part of the first subscription with Oxfam by 31 July 2012 subject to confirmation that the City Corporation would be investing on the same terms as Oxfam.