WealthBriefing talks to a prominent figure in the UK philanthropy/impact investing world, involved with Big Issue Invest and The Big Issue Group. For much of his life, Nigel Kershaw has worked in the space, founding social enterprises and changing the way this sector is viewed.

As part of our continuing focus on impact investment and philanthropy, this news service has interviewed Nigel Kershaw OBE, FRSA, chair of The Big Issue Group, and co-founder of Big Issue Invest and The Big Exchange. The Big Issue publication is a familiar sight on the UK’s streets. The organisation has changed the narrative of people facing homelessness and poverty – showing that they can take control of their lives. Since 1974 Kershaw has created, built and scaled social enterprises and social investment. He joined The Big Issue Group (TBIG) in 1994, becoming its CEO and then group chair. Prior to joining The Big Issue, Kershaw founded three printing and publishing social enterprises and is a Social Enterprise UK "Champion of Champions."
 

WealthBriefing: Most broadly, what is the investment philosophy of Big Issue Invest: is it about doing good in a way that yields a positive and competitive investment return for clients? Are there other elements you would mention?
Nigel Kershaw: BII was founded to create business solutions to tackle and prevent poverty for future generations. It is not about charity. The Big Issue itself is not a charity but a business, a social enterprise with a mission, assets, and dividend locks, which reinvests any profits back into the mission. The Big Issue magazine was co-founded by an international listed company, the Bodyshop, with the tag line “a hand up, not a handout,” and this is the philosophy which Big Issue Invest (BII) adopts. We invest in organisations, such as social enterprises, which aim to create sustainable solutions in an impactful way, and this includes a return for investors which has a clear, transparent impact.

What in your view are the key steps that individuals can take for preventing poverty, with help from others? 
BII manages or advises on over £450 million ($573.9 million) of impact funds through its investment funds and has directly invested in 550 organisations and social enterprises which are creating effective solutions for preventing and dismantling poverty. We also have an Impact Advisory Service that creates innovative impact methodologies, builds, and launches funds, carries out verification and confirmation, and writes and produces impact reports. We, of course, walk the talk and produce an impact report on ourselves to make sure that we are walking the impact talk. It is about creating effective business solutions and there is so much private capital out there that could be used to create even more impactful solutions. 

You have partnered with large financial firms. What’s your assessment of how well wealth management advisors and their clients understand what you do? 
We have been working with the likes of abrdn and Columbia Threadneedle over the last 10 years. The UK Social Bond Fund – originally launched with Columbia Threadneedle – is now a decade old and has been well supported by a small cohort of wealth managers and investment advisors. 

We also co-founded the Big Exchange, an online investment platform, which includes 27 asset managers, 72 impact rated funds for their contribution to people and planet and £60 billion of assets under administration. We are additionally working on other fund launches such as a global gender bond fund and global equities healthy societies fund.

We chatted about how “greenwashing” and “socialwashing” are all too often synonyms for fraud. Regulators are starting to crack down on these areas, but what more should regulators and the industry do to drive this behaviour out? 
Not only fraud! We talk about money laundering but green and socialwashing does the reverse – it takes clean money and makes it dirty! We need the finance industry to make what it does understandable, accessible, affordable, transparent, and accountable to ordinary people who invest and save in it.

We launched our Impact Advisory Service at the end of 2023 and part of its offering will be to confirm and verify impact. All too often social and green impact claims are not grounded in the lived experiences of people and communities claimed to be impacted. So, let’s ask people and communities directly to verify what difference the impact investments and products have made to their lives. 

What is the most common misconception about what you and your colleagues do?
A lot of people assume that BIG is a charity. We are not and never have been. BII looks for business solutions to social problems and demonstrates that investors do not necessarily have to sacrifice returns to achieve impact. As individuals we can all do this by investing in impact solutions.

Since you launched Big Issue Invest, what has been the most important development? 
When we launched our first fund in 2010 it took conversations with 650 individuals and organisations to raise £10 million – nobody knew what we were talking about – and maybe still don’t! We achieved the first close of the most recent Fund IV, just before Christmas, in part, thanks to two companies – insurance companies Beazley and Aspen. We have brought the mainstream to impact investing – that’s the greatest achievement.

BII gets involved with equities, debt, private equity, and the like. All these areas hit different requirements from investors in terms of risk, return and time periods. How satisfied are you that you now have a diversified range of ways for people to invest?
We have a broad range of private markets investments from a high-risk fund investing in diverse-led businesses through to an impact private debt fund. and we are looking to develop more listed markets funds such as a gender bond fund and healthy societies equities strategy. We are always looking for more opportunities to create fund solutions which will dismantle poverty for future generations.

Banking and credit: we have spoken about the challenge of enabling unbanked people, and those without a credit history, to obtain a bank account. Can you talk a bit more about this side of your work and why it is so important? For example, can you tell me about the HSBC “No Fixed Abode” scheme?
We devised and partnered with Experian to launch The Rental Exchange to level the playing field between renters and people who pay mortgages so that tenants will find it easier to open a bank account, arrange a better rate for their utility bills, obtain a better mobile phone rate, have a loan application approved, apply for a credit card, shop online or arrange a mortgage etc. The Rental Exchange has the potential to improve the credit file of 2.7 million tenants.

HSBC’s No Fixed Abode scheme lets our vendors set up a basic bank account with no fixed address and limited ID. This is so important as more vendors go “cashless” and it helps people become more financially resilient and included. 

The pandemic clearly put concerns such as health, nutrition, the environment, mental health, and access to education right up the agenda. As a result, many poor people have struggled. Can you talk about the way this episode motivated you to look at investment and financial solutions?
What the pandemic taught us is that the solutions are not just about traditional health funds, what I call pharma and pacemakers, but preventing poor health in the first place. This has led us to create the Healthy Societies global equities fund which we aim to launch this year with a leading asset manager.

Who inspires you? 
It’s not who but what. I’m inspired by the most recent companies and social enterprises that BII has invested in! So, two come to mind. The first is a chocolate-making business founded by a couple for providing employment for their autistic child. It has now grown into a business which employs 15 autistic people. The other is a recruitment business for people with neuro diverse skills, which aims to get 10,000 people into employment. This is especially close to my heart as I have a form of dyslexia.

You have a background in printing and news. Please talk about how this has helped shape the kind of person you are today and the causes you champion.
I worked at the Mirror Group when the fraudster Robert Maxwell was in charge, and I saw what he did when he stole our pensions. This really forged my belief that we need to democratise finance and make it understandable, accessible, and accountable to ordinary people who invest their savings and pensions in it.

You spoke about your ideas, the dangers of abstract ideologies, and a desire to take things to the level of individual people. How important is it that this approach continues to shape everything your organisation and colleagues do?
The old adage goes “Give a person a fish and they can eat for a day; give a person a rod and they can fish for life.” I’ve added “Charge a small amount for the rod and even more people can fish for life.”

I’ve always believed that every individual can make a difference, and it is important that people believe that. So far, we have helped over 2.5 million vulnerable people through the 550 organisations we have invested in.