Big questions for a big society

19 Dec 2013

Most weekday mornings Simon Rowell grabs a Boris bike and cycles through Hyde Park, Green Park and St James’ Park to his Fleet Street office in the former Agence France Press building from his Earls Court home.

Two things: he’s not a journalist and Kangaroo Court – for those of you ‘of an age’ – is somewhat gentrified now and the days of a dozen Aussies to a flat are long gone.

For the past year, Rowell, a UQ  law and commerce graduate, has helped set up the strategy and marketing development team for London-based Big Society Capital (BSC), touted as the world’s first social investment bank.

It’s a bank that deals in money and people – disadvantaged people, poor people, teenagers at risk of falling through society’s cracks, unemployed people.

Rowell says BSC is the first investment bank of its kind in the world.

“This is a type of investment that aims to make a financial return and a social return,’’ he says.

“It aims to improve people’s lives through education, health, employment opportunities – there are any number of things it can do.’’

BSC is the brainchild of Sir Ronald Cohen, who has been dubbed the father of both British venture capital and of social investment and it was set up in 2012 after he was tasked by the UK Government to find ways to address the needs and social issues of deprived communities through the tools of finance.

Rowell says individuals or institutions can invest in funds alongside BSC and those funds are then invested in a charity or social enterprise to help them grow their operations to address specific needs.

“There are several investment types that we do but one of the more publicly recognised is the social impact bond,’’ he says.

“The bond allows a private investor to get upfront capital to a charity to provide a socially innovative service to challenge an entrenched social problem that the government is facing, like prisoner reoffending.

“It would be an issue that’s costing the government a lot of money but they don’t have the capacity to experiment or take risks to find a solution.

“The bond works so that the money comes from the investor to the charity. The charity works on the social issue and if the improved above set benchmarks, the government will make savings, some of which will be shared with the investor.

“The bonds allow a risk transfer from the government to the investor and provides enough funding and working capital for the charities to really go for it.’’

A very successful example is the social impact bond Think Forward, in which BSC and another social investment company Impetus – Private Equity Foundation invested £900,000.

In turn, Think Forward invested in the East London employment charity Tomorrow’s People.

This area of London was notorious for its excessive rate of high school drop outs and Tomorrow’s People was given three years’ funding to implement an early intervention program to reduce the drop-out rate.

In the past year, the first year of the program, it was aimed at 350 students across 10 schools. The target was for 30 per cent of those students to each achieve five GCSEs with grades from A+ to C.

The result was 55 per cent, which means BSC and Impetus will get their investment back plus a return from the government.

A former corporate lawyer, Rowell says that his work with BSC is professionally and personally enriching and rewarding.

“I’m now working at a higher level, I’ve got a lot more autonomy and a lot more capacity to be entrepreneurial and to explore where the market needs are,’’ he says.

London wasn’t Rowell’s first stop after graduating in 2004. Since then he has, variously, called Vienna, Shanghai, Moscow and Boston (Cambridge) home.

In that time he has worked with the London Organising Committee of the Olympic and Paralympic Games, the Department of Prime Minister and Cabinet in Australia and with law firm Linklaters LLP.

He also spent a few months United Nations Commission on International Trade Law.

For now, though, London is where it’s at for Rowell and he couldn’t be happier.