insight - Burges Salmon

Keeping ithumanHelping to finance changeIn 2011, ethical banking pioneer Triodos approachedBurges Salmon to assist with the formation of aninnovative investment fund which would allow them tohelp improve education and employment prospectsfor vulnerable young people living on Merseyside.This support was to be delivered under its ‘New Horizons’programme, along with delivery partner Greater MerseysideConnexions Partnership (GMCP). Central to this programmewas the ability to access payment by results funding throughthe Department of Work & Pensions’ (DWP) new socialimpact bond – The Innovation Fund – as well as the supportof private investors.Burges Salmon won the chance to work alongside Triodosfollowing a competitive pitch in which, in recognition ofthe broader social value of the fund, we agreed to workcontingently until Triodos was successfully named preferredbidder and then subsequently with a pro bono element.Our technical role covered two distinct areas. The firstwas the initial creation of an appropriate fund structure.Our corporate finance team, led by partner Chris Godfreyand supported by senior associate Claire Porter-Bryant,managed this phase including the transition from aninitial limited partnership to a corporate structure witha syndicate of investors including a number of charitiesand ethical funds.The result, Triodos New Horizons Limited, is an investmentfund which can attract up to £4.5m social impact bondpayments from DWP, alongside substantial privateinvestment. Unlike typical social service delivery, this DWPfunding is provided at risk by the private sector socialinvestors, who will only achieve a financial return if thepre-agreed educational, training and employment outcomesare met.The second area of Burges Salmon’s work saw ourcommercial projects team, including partner Matt Ramusand associate Pete Jackson, advising on both the coreoutput-based contract between DWP and the fund vehicle,plus an input-based contract down to GMCP and its ownnot-for-profit contractors.This has been a groundbreaking initiative and Burges Salmon has helped us to navigate some ofthe more complex legal and commercial aspects of this new fund – as well as negotiating consensusamong the private investors involved.Dan Hird, Head of Corporate Finance, Triodos Bank20 INSIGHT Burges Salmon Annual Review 2012