The story behind The Big Exchange
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by Nigel Kershaw, OBE
The Big Exchange, co-founded by The Big Issue, is an online social impact investment platform built for everyone in the UK to be able to access actively-managed funds rated for their ‘positive impact’. It has 11 investment managers and 40 funds that can be invested in online. Here is the story of how Nigel Kershaw OBE came to found The Big Exchange and bring impact investing to us all so everyone’s money can count for more. Capital at risk.
“We find ourselves in a completely changed world since Covid-19. There are challenges young people face which have not been experienced in their parents’ or their grandparents’ lifetime. I am telling this story at a time where the Covid-19 pandemic has affected job prospects and a generation of young people are faced with potential unemployment. Where 500,000 people are at risk of being evicted and becoming homeless due to the failure of being able to pay mortgages or rent. There are also the continual challenges we face with climate change that is not going to go away and are interdependent on the well-being of society.
“In terms of my life, they say a rolling stone gathers no moss. I now live on the same road as where my father lived 85 years ago in Borough, London. I started out as a lithographic printer, was a Trade Union official, and founded three printing and publishing social enterprises. Building something that works for everyone was important when The Big Issue Group (which publishes The Big Issue magazine, along with Big Issue Invest, which manages and advises on over £300m in impact funds) set out to build The Big Exchange. It had to sit with our mission of preventing and dismantling poverty — a hand up not a hand-out — through a bottom-up rather than a top-down approach.
The Big Exchange — co-founded by The Big Issue
“The change we’ve been working on so hard to bring to future generations all started with The Big Issue, which was founded by Lord John Bird and Gordon Roddick (co-founder of The Body Shop) in 1991. I joined in 1994, subsequently becoming the CEO and then Group Chair.
“We enabled vulnerable people to have the ability to earn a living (rather than begging, stealing and being dependent on welfare) by buying The Big Issue magazine for £1.50 and selling them for £3.00 keeping the profit. As a team, we are proud to have bought dignity and self-esteem to a hundred thousand people and created a proud bunch of micro-entrepreneurs.
“The Big Issue has always had financial inclusion at its heart. It was the first leading social enterprise in the UK. A social enterprise is an organisation that has a purpose of financial, social, and environmental well-being at the heart of its strategy. It has a mission, an asset, and dividend-lock and any profits are re-invested in that mission. We brought the mainstream to us — we are impacting the mainstream!
“Life on the streets was rough in the 1990s for Big Issue vendors and they were at risk of getting mugged and losing their daily earnings. We created a safe place for our vendors to keep and save their cash. However, we were not able to be a bank, which was what the vendors really needed, so we partnered with a bank at the time called HBOS, now part of Lloyds, who opened a branch in the Glasgow office an afternoon a week and this was the first-time homeless people were able to open a basic bank account. We then received a £120,000 grant to launch Big Issue Invest. The knowledge we had gathered as social entrepreneurs we were able to bridge with our contacts in finance, and our journey extended — from publishing — into what we know today as ‘impact investing’.
The Big Exchange is formed
“It was in the early 2000s when mainstream financiers and investors started to be aware of what The Big Issue as pioneers were creating, that is this intersection between finance and planet and people, which we today know as ‘impact investing’. Despite many heavyweights joining this new trend in financial markets, John and I could never stop asking ourselves,
“Why can’t the average Big Issue reader invest?”
For us, the answer was winning over the hearts and minds of ordinary people if we were going to change the world.
Built by experts for everyone
“What we do at The Big Issue Group is consistently go further for our mission. With buy-in and backing from the big firms we had been working with within the financial sector, we managed to get a group of people together who believed with us that ‘we can do more’. And so, around a breakfast table, we co-founded The Big Exchange to build a new financial eco-system — one that is designed to work for everyone and that delivers a positive impact on society and the environment. Our idea was that The Big Exchange could be the place that puts money on a level playing field and provides accessible, affordable, and socially & environmentally responsible financial services for everyone.
“I want to pay a tribute here to Campbell Fleming until recently Global Head of Distribution at our partners Aberdeen Standard Investments and a Director of The Big Exchange. He is one of the unsung heroes of impact investing. We had been working together since 2012 when he was CEO of Columbia Threadneedle, another of our partners, and together we created the first social impact bond fund. It was from that relationship and friendship that the idea of The Big Exchange was borne. Without him, it would not have been possible.
“Other founder partners came on board to support, all integral to our success and at the time of writing we have a consortium of 36 funds, offering very low fees and a minimum investment of £25 so we can bring impact investing to everybody.
“We also have three ready-made bundles put together by an expert team based on risk (cautious, balanced, and adventurous) for people that want to match their investments with how much risk they feel comfortable with. If not, people can pick the funds individually. We’re building this to be as inclusive as possible and our fee is amongst the cheapest on the market at 0.25% which means 25p for every £100 invested on The Big Exchange.
“The above partners, asset managers (some award-winning), and asset owners were aligned on our mission to transform finance.
What The Big Exchange does today
“Today at The Big Exchange we are building a marketplace for financial inclusion and access to products which have a mission and purpose to create a fair financial system that works well and works for everyone. We have started with investment products (such as Individual Savings Accounts, Junior Individual Savings Accounts, and General Investment Accounts) that we all together help bring about positive social and environmental change through what the funds themselves invest in on behalf of the investors. Also importantly, one of the reasons finance has traditionally been an exclusive club to many is because of the financial jargon. So this marketplace will take the jargon and intimidating language out of finance.
“The Big Exchange does not provide financial advice. We have Square Mile as a financial assessment partner and I am proud to have built our own impact methodology to measure the impact of the investments.
“It’s very hard to measure ‘impact’ (even the impact professionals are struggling to find a unified set of tools to do this that everyone agrees upon) so we have grouped the 17 United Nations Sustainable Development Goals (UN SDGs) into two groups — Planet and People. These Sustainable Development Goals, also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
“By dividing the 17 UNSDGs into people and planet we can make it really clear for both the seasoned investor and the new. On the platform, you can find a very thorough description of the real impact your investments could make, and we give each fund medals to simplify further. You can invest based on Gold, Silver, or Bronze medals. Gold means it has the highest ability to contribute to social or environmental change. There is in-depth information backing each fund. There is something to explain it for someone fresh to investing as well as an old hand. A user will be able to see transparently and openly what the contribution of the fund is towards people and planet impact in a very open way.
“Investing isn’t the end game to complete our mission and we plan to roll out other products that help build financial resilience and improve wellbeing over the coming months and years. It doesn’t matter who you are, we all have aims for how we spend and invest our money. While one person’s aims may be different from the next person’s, we all have challenges that are uniting us such as climate, social change, and pandemics.
“We plan to roll out other products such as a cash account and money management app and within the next year, a further range of services and products wrapped around the theme of ‘People & Planet’ are planned to emerge.
“A major milestone for The Big Exchange has been Jill Jackson coming on board as Managing Director. Jill was formerly the Head of Retail at Aberdeen Standard Investments, and she also was a member of their impact advisory committee. Jill is building a mission-driven team to bring the products we roll out to scale. It took Jill and the team’s commitment, professionalism, and tenacity to bring The Big Exchange to life.
Today for tomorrow and future generations
“Ultimately, to achieve our goals with The Big Exchange, we need to reach millions across the UK. People can take control of their own money; people’s personal investments can make a positive difference to the world; people’s actions, here and now, can make a lasting difference today for tomorrow’s generations. It is ordinary people across the UK who will make The Big Exchange transformational.
“Whatever matters to you most — whether it’s lowering carbon emissions, creating jobs in the green economy, contributing to social housing, developing vaccines, or creating on-line learning tools — by investing through The Big Exchange, you can make a difference.
“Please join me and our movement to make money count for more.”
Nigel Kershaw, OBE
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Please remember that when investing, making money is not guaranteed and your capital is at risk. The value of your fund can go down as well as up. Tax treatment depends on an individual’s circumstances and may be subject to change.
The Big Exchange (TBF) Limited is a wholly-owned subsidiary of The Big Exchange Limited. The Big Exchange (TBF) Limited is an Appointed Representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 574048).
