DBJ Invests in Bridges Fund Management's Social Outcomes Fund II in the UK - Financial support for new collaborative projects to solve social issues -

Development Bank of Japan ("DBJ") has agreed to invest in the Bridges Social Outcomes Fund II ("SOF II"), which is managed by Bridges Fund Management Limited (CEOs: Philip Newborough & Michele Giddens, "Bridges"). This is the first attempt by a Japanese financial institution to support Social Outcomes Contracts overseas through a fund.

Social Outcomes Contracts, which evolved from the concept of "social impact bonds", are a new type of collaborative partnership between the public and social enterprise sectors. The goal is to address key social issues faced by national and local governments by giving expert delivery partners more freedom to design and deliver effective solutions. Government only pays for successful outcomes achieved, while funds managed by organizations like Bridges provide the working capital necessary to deliver the project.

In the UK, where social impact bonds and social outcomes contracts originated, there have been more of these projects implemented than anywhere else in the world. They have supported various programs designed to solve social problems and reduce future costs to Government, for example: helping adults with long-term health conditions to reduce their reliance on doctors; providing mental health and employment support for NEETs; helping homeless people with housing and employment; and running anti-recidivism programs for people leaving prison.

In Japan, with the declining birthrate and aging population, the burden of social security expenses on national and local government is rising. Local government is trying to reduce this cost by introducing outcomes-based contracts in the health and medical fields. The spread of these contracts is also mentioned in the Japanese government's "Growth Strategy Execution Plan 2019."

Since April 2019, DBJ has been conducting domestic and overseas market research of social outcomes contracts and has designed a structure that is suitable for the Japanese market, as part of its project to create a new business.

Through a survey of the market in the UK, DBJ deepened its relationship with Bridges - which has supported over 40 social outcomes contracts, more than anyone else in the UK - and decided to invest in its latest fund, Bridges Social Outcomes Fund II. Bridges provides not only up-front funding but also additional support for management to ensure the project meets its performance objectives.

Through its investment in Bridges Social Outcomes Fund II, DBJ intends to gain advanced knowledge about how to use outcomes-based structures to solve social issues. DBJ and Bridges are pleased to enter into a strategic partnership to further develop the model for using outcomes-based contracts to support projects that address social challenges in Europe and Asia.

With the aim of using outcomes-based contracts to address social problems, DBJ continues to investigate the market overseas, develop schemes suitable for the Japanese market and arrange financing for individual projects.

Based on our corporate philosophy of "Designing the future with financial expertise," building customer trust by solving problems through creative financial activities and realizing a prosperous future together, DBJ will continue to provide financial support to solve social issues.

Structured Finance Department  Tel:03-3244-1590
Business Planning & Coordination Department Tel:03-6311-5048

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