A new £15m Finance Fund that will offer selected organisations investment finance has been established by the Esmée Fairbairn Foundation.

This follows a nine-month pilot, partnered with Venturesome, that the Foundation undertook to explore the opportunities for alternatives to grant finance and to build on its previous loans programme.

“As with the pilot programme in which we invested in businesses such as Global Action Plan and Battersea Arts Centre, the new Fund will be offer ‘equity-like’ investments,” explains Dawn Austwick, the Foundation’s chief executive.  ”For example, we will provide financing, and in return we will have an opportunity to share in the profits once the organisation hits its financial target.”

Austwick says the Foundation recognises that this venture requires a long-term view, and at this early stage is may use various mechanisms. “We are still exploring and are open to using loans, guarantees, underwriting and patient equity,” she said.

The Fund is an addition to the Foundation’s grant-making portfolio, and it will inlcude opportunities to co-invest and work collaboratively.

The Fund will not be open to applications, and the Foundation will utilise its networks including organisations such as Venturesome and Charity Bank which already work in the marketplace.

“This is a learning journey and Esmée Fairbairn will take things slowly. Our goal is to strengthen organisations’ financial sustainability and also to make the Foundation’s money work harder.”