The 'Future for Children Bond' - nice idea, but a risky investment

The new social investment bond from Essex County Council is a novel take on charitable investing. But beware, says Merryn Somerset Webb, this investment is anything but safe.

Do you want to put your money to work for good, but also be sure that you don't lose any money either? And somehow give without actually giving? Then I've got a deal for you. This week saw the launch of yet another social investment proposition the Future for Children Bond. This comes from charitable investment organisation Allia, and it works like this.

You hand over your cash (minimum subscription £15,000) for eight years. The money is then divided and invested in two separate things. The majority of the capital (78%) will go into a "low-risk ethical investment in social housing". The remainder (20%) into a "high-risk social impact bond" (SIB). That means it will be used to support a programme in Essex that intervenes in "at risk" families and supports them at home with a view to keeping their children out of care.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.