Unique Fund Creates Jobs
Den Sociale Kapitalfond Invest I K/S was established in 2017 by the Danish investment firm Den Sociale Kapitalfond. The fund aims to create jobs for vulnerable groups in Denmark and deliver both financial and social returns.
The fund has a total investment capital of 289 million DKK and aims to invest in 10-20 companies over its 10-year lifespan. The model is structured so that the fund manager’s fees depend on the results achieved across both financial and social outcomes.
Investors include the European Investment Fund (EIF), Vækstfonden, Tryghedsgruppen, Novo Nordisk Fonden, Sparekassen Sjælland-Fyn, Hempel Fonden, Færchfonden, Østifterne, Færch & Døtre, Den Sociale Kapitalfond, and others. Ferd Social Entrepreneurs invested in the fund in 2018 and actively participates in its Investment Advisory Board.
By the end of 2023, the fund had invested in ten companies, three of which—Hitsa, Refurb, and Danpal—have been successfully exited with strong social and financial outcomes. Den Sociale Kapitalfond Invest I K/S completed its investment period for new investments in January 2024, with its portfolio now comprising Koatek, Profilservice, Auto Mobil, WaterCare, BM Silo, Tolstrup, and Langebjerggaard.
The fund’s five-year impact goals are defined on a case-by-case basis and typically include a requirement that 20 % of the employees in the invested companies come from marginalized groups. Den Sociale Kapitalfond Invest I K/S set interim KPIs for the first five years and achieved 123 % of these goals by the end of 2023. Each company has a long-term five-year goal, and as of Q4 2023, 80 % of these have been achieved.
The fund reported that the portfolio companies generated 43.6 million DKK in positive social value for the society in 2022 based on the GROW methodology, by providing jobs and education to people on the fringes of the labor market.