The fund will be managed by Kin Capital, with Social Finance acting as investment adviser.It will partner with one or more Social investment Financial Intermediaries (SIFIs) who will provide the majority of the funding, thereby allowing a much larger deal size than the present SITR maximum.
Target charities will generally have at least a 3 year record and annual revenues exceeding £3m. Loan terms will usually be 3-5 years and the target IRR of the fund is 4% (excluding benefit of SITR relief). Each investor is expected to gain access to at least 5 enterprises.
Initial costs of the fund are zero but investee enterprises will pay an arrangement fee of 3% plus 2% per annum for monitoring and 0.35% for admin.
Investors will pay a performance fee of 20% of returns generated in excess of 4% per annum (excluding SITR relief).