Interview – Danyal Sattar


The fascinating thing for us is that we have been able to sustain ourselves in a way that has been extraordinary. There are two sides to us. We are an independ- ent organisation with about £23m in our loan funds and £43m of funds under management across our three partner- ship funds. We are a micro organisation in the finan- cial services industry, but what we have done is say to the people we invest in: “Your request is sensible, let’s stop taking money out of the sector.” We can then go to our investors and say: “To do that deal you need to do the same thing for us. Let’s all pull together.”


As an ecosystem, if we move together and do that kind of pause then it works well for all of us. Our parent organisation, The Big Issue, also went through a profound transformation.


The magazine arrived through my door today. It is normally sold by around 2,000 vendors up and down the country every day. They are self-employed. They buy the magazine for £1.50 and sell it for £3, so their margin is £1.50. As you can imagine that when the home- less were taken off the streets at the start of this pandemic, the vendor base disap- peared. The people who buy the maga- zine are also off the streets.


There was an incredible pivot in the mag- azine. In 10 days they launched an app version. The magazine came through my door because I took out a subscription. We always had a small-scale subscription operation for the magazine and that has been pushed out and promoted. The magazine has had tremendous sup- port. The Times ran an appeal for The Big Issue, which has been incredible. That kind of donation has supported our founders.


It has also meant that the organisation pivoted its business model so that by the time the vendors come back to the streets, we still have a product for them to sell. We have done many things in the maga- zine business that had to be done in terms


18 | portfolio institutional July 2020 | issue 94


of transitioning to a cashless society by making sure that every vendor can take cashless transactions in a way that they could not before. On The Big Issue Invest side, which I lead, and on the magazine side, this dem- onstrates that charities and social enter- prises are having to carry on serving peo- ple when they need it the most.


Are people still asking you to fund their businesses at the moment, or is it mainly existing clients needing help?


It is a mix. I tend to think that everything I believed before the pandemic is no longer true. That has probably been the pattern of this pandemic.


Before the lockdown we were looking at our portfolio and asking who is going to be impacted. I thought the care businesses, such as Cornerstone in Scot- land or the employee-led Be Caring, would be where we see some of the big- gest financial impacts. We were anticipating that staff would get sick, they would have to bring in agency staff and their costs would go up. That has not been the case.


The government interventions to support the care sector have been reflected in what we see in our portfolio. Local authorities have been able to pay people differently than normal. They are paying their staff more in advance rather than in arrears. So all kind of things have washed through that I had not anticipated, which has been positive. But charities or social enterprises that offer a public-facing service are still being hammered. People offering educational services and anyone else out there interacting with other people have had their business model hammered. In terms of financial support, we have had people approaching us to help transform their operations to the new normal. It’s investing to trans- form for a new situation. We have not seen the start of this yet, which may be a bit of a depressing thought, but there are reasons why we ask if companies have three months


of


reserves. If they have, it is probably a good thing.


The months have been ticking by and we are just beginning to see the financial impact on charities and social enterprises.


It’s pretty simple stuff. We raise money and reinvest it. People like the transparency and connection that they get with social investment.


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