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The Good Economy (TGE), the Institute for Economic Development (IED) and the Impact Investing Institute (III) have announced the launch of their leading-edge Place-Based Impact Investing (PBII) Network. This pioneering collaboration between local authorities and institutional investors builds on the findings and conceptual model of PBII presented in TGE’s and the Impact Investing Institute’s landmark 2021 White Paper Scaling Up Institutional Investment for Place-Based Impact, developed in partnership with Pensions for Purpose.

The overarching objective of the network is to create a trusted environment where local authorities and specialist investment managers can meet for knowledge sharing, mutual learning and the development of innovative financing solutions to scale-up institutional investment as a force for good in helping places across the UK achieve local economic resilience, prosperity and sustainable development. The PBII Network will act as a knowledge community, catalyse the diffusion of innovative PBII approaches and provide a voice for local government and private investors to influence market and policy developments.  

Mark Hepworth, Co-Founder of TGE & Research and Policy Director, said: “The UK has by far the worst levels of social and spatial inequality of all OECD countries. Entrenched poverty and inequality pose systemic risks to our economy, society and democracy. The Government has called on institutional investors including LGPS funds to play a key role in providing the financial capital needed for Levelling Up. Local authorities are positively seeking local investment so they can create better places. And a growing number of investment firms are keen to make a tangible difference socially and economically. The PBII Network is designed to bridge the gap between these stakeholders, paving the way for private capital to understand local needs and opportunities and deliver place-based impact across the UK.”

Founding members of the network include:

Investors

• Abundance
• AEW
• Bristol and Bath Regional Capital
• Cheyne Capital
• Columbia Threadneedle
• Foresight
• Gresham House
• Octopus Investments
• PfP Capital & igloo Regeneration
• Schroders
• Triple Point

Local authorities 

• Association of South Essex Local Authorities 
• Barnsley Metropolitan Borough Council
• Bath and North East Somerset Council
• Bristol City Council
• Essex County Council
• Hertfordshire County Council
• Manchester City Council
• Liverpool City Region Combined Authority
• North of Tyne Combined Authority
• Southampton City Council
• Wakefield Council

Membership of the network is by invitation only, with founding members chosen for their experience of and interest in place-based impact investing. Building on their collective knowledge, the network is designed to foster practical and constructive dialogue on how to develop projects that drive change, deliver returns to the investment community, and can be both replicated and aggregated.  

Kieron Boyle, CEO of the Impact Investing Institute, said: “Directing private impact capital to underinvested places across the UK has been shown to be an effective way to raise living standards, provide economic opportunity, and build thriving, inclusive communities. We are excited to partner with The Good Economy and the Institute for Economic Development on bringing together institutional investors and local authorities so we can unlock more impact capital that better serves people and communities.”

The inaugural programme of the PBII Network will focus on building relationships between investors and local stakeholders in order to build trust and a shared understanding. The network also aims to establish norms and practical guidance to support the wider roll out of place-based impact investing across the United Kingdom. Network participants will come together for three primary events around the country during the year and a number of smaller thematic events aimed at findings solutions to specific problems. 

Nigel Wilcock, Executive Director of the IED, added: “Sustainable economic development in the UK requires a fresh approach focused on meeting diverse and specific needs of places across the country. This means that new thinking is required and we’re excited to partner with TGE and the Impact Investing Institute in the development of this new investment paradigm.”

The PBII Network builds on the work of the PBII Forum (PBIIF), led by Pensions for Purpose in partnership with TGE and the III. The PBIIF was established in 2021 to provide a forum for pension funds as asset owners to understand and share learnings on how to increase the flow of capital that has a positive place-based impact. The Forum currently comprises over 500 members including asset owners, investment consultants, trustees, and asset managers. 

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Further information

Place-based impact investment centres on investments that yield appropriate risk-adjusted financial returns as well as positive local impact, addressing the needs of specific places to enhance local economic resilience, prosperity and sustainable development. These investments can be structured across ‘pillars’ or sectors such as affordable housing, SME finance, clean energy, infrastructure and regeneration. Investments in these sectors are known to provide stable, attractive, long-term returns with lower volatility than many other asset classes. Currently, investment institutions tend to adopt a silo-ed approach, either investing in just one of these pillars or investing in several but within different areas of their business. The PBII Network is designed to create a more holistic approach, recognising that each of these pillars is intrinsically linked to the others and that the best outcomes will be delivered by cross-sectoral, place-based investment.