The PBII Project

The Place-Based Impact Investing Project: focusing capital on the opportunity of place


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The Place-Based Impact Investing (PBII) Project was founded by The Good Economy, the Impact Investing Institute and Pensions for Purpose to explore how to scale-up institutional investment into opportunities that enhance local economic resilience, sustainable development and the Levelling Up agenda.

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The PBII Project

The PBII Project
Place-based inequalities are more extreme in the UK than in most comparable economies and have persisted for generations. Meanwhile, the pandemic coupled with Brexit have moved this seemingly intractable reality to the centre stage of public debate.

With the costs of the “Levelling Up” agenda expected to exceed £1 trillion over the next 10 years, there is a clear need for private capital to be mobilised alongside public investment. Currently, only a very small fraction of UK pension money is invested directly in the UK in sectors that could drive more inclusive and sustainable development.

The PBII Project was launched to explore how to scale up institutional investment focused on the opportunities of place. A six month research programme – led by TGE and backed by DCMS, the City of London Corporation and Big Society Capital – culminated in the publication of a white paper on 26 May 2021.

While the report focused primarily on the role of the £326 billion Local Government Pension Scheme, the report built a powerful case to suggest PBII has the potential to become a new paradigm or lens for all kinds of investors.

As such, the project is currently looking to harness the interest generated amongst local government pension schemes, local authorities, fund managers, asset owners, consultants and other place-based stakeholders by inviting them to participate in a second phase.

PBII White Paper findings:

- Assets identified as place-based investments already exist in portfolios of local government pension schemes and can provide stable, risk-adjusted returns and low volatility

- Currently, place-based impact investment is limited, with local government pensions schemes investing around 1% of their portfolio in ways that could directly support local and regional economic development and positive place-based impact creation

- However, there is a legacy of local investing by local government pension funds, reflected in statutory guidance allowing for 5% of funds to be allocated to PBII. If this level was achieved, £16 billion of investment would be focussed on delivering both financial returns and responding to the needs and opportunities of specific places.

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Place-Based stakeholders

The White Paper is timely and relevant to anyone with an interest in scaling-up institutional investment into opportunities that connect capital to place.

PBII investment opportunities include social and affordable housing, small business finance, clean energy, infrastructure and regeneration. As such, these opportunities would include delivering investment in local businesses, quality jobs, affordable homes and town centre regeneration.

While the initial phase of the project has focused on the role of the £326bn Local Government Pension Scheme, the project believes PBII has the potential to become a new paradigm or lens for all kinds of investors.

As such, this project offers exciting potential to anyone interested in understanding how investment can yield financial returns, as well as generating social and environmental impact to enhance local economic resilience and sustainable development.

To receive updates about the PBII Project and information about opportunities to participate, sign up here.

Article
PBII Project launched to harness the potential of impact investing to level up the UK NEWS PBII Project launched to harness the potential of impact investing to level up the UK The Place-Based Impact Investing Project publishes eagerly awaited white paper
Photo by Okwaeze Otusi