Feds name three managers for $400-million social finance fund

The federal government has launched its $400-million social finance fund after naming three investment groups to invest in social purpose organizations.

The government selected Boann Social Impact, Fonds de finance social – CAP Finance and Realize Capital Partners to act as investment managers for the social finance fund, which will support organizations focused on affordable housing, food insecurity, poverty and other issues. The managers were chosen after a competitive process.

The fund managers will receive $400 million over the next five years to make social finance investments. They’re expected to leverage up to another $800 million in private investment, providing investors with the opportunity to direct their money toward social initiatives.

The managers will allocate at least 35% of their investments into initiatives promoting social equity, including at least 15% into initiatives promoting gender equality. Fonds de finance social – CAP Finance will invest specifically in Quebec, while Boann Social Impact and Realize Capital Partners will invest in the rest of Canada.

Fonds de finance social – CAP Finance, a network of Quebec-based financial institutions and organizations focused on the social economy, will receive $89.8 million. Boann Social Impact, a new joint venture with Toronto-based investment fund manager Encasa Financial Inc. and the not-for-profit trust Table of Impact Investment Practitioners, is receiving $154.1 million.

Realize Capital Partners, a collaboration between Toronto-based impact investment management and advisory firm Rally Assets and the early-stage venture capital fund manager Relay Ventures, also based in Toronto, is getting $153.4 million.

Realize said the Realize Fund 1, a closed-end private fund, expects to beginning committing capital this summer with a target raise of $405 million. The fund will invest across the country and across private asset classes, including private equity, private debt, real assets and venture capital. Its investment strategy includes established and emerging private impact fund managers, community lenders making a local impact, and direct investments in some social purpose organizations.

The government said the fund will help Canada achieve its United Nations Sustainable Development Goals while helping social purpose organizations grow and and serve diverse communities. The fund was first announced in the government’s 2018 fall economic statement.

The managers are expected to repay the $400-million government investment at the end of the program, except for roughly 10% used to cover administrative and other costs.

Mark Burgess

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Mark was the managing editor of Advisor.ca from 2017 to 2024.