The Global Impact Investing Network (GIIN) published their sixth Annual Impact Investor Survey
Data was collected globally from 158 separate impact investing organisations and respondents included: fund managers, foundations, banks, development finance institutions, family offices, pension funds and insurance companies.
- Survey respondents committed a total of $15.2 billion to impact investments in 2015 and plan to increase capital committed by 16% to $17.7 billion in 2016
- This covered 7,551 deals in 2015 with a plan to commit capital to 11,722 deals in 2016
- Fund managers raised $6.7 billion in 2015 for impact investing and plan to raise $12.4 billion in 2016
- The vast majority of respondents reported that their investments have either met or exceeded both impact and financial performance expectations
- The most commonly targeted social impact themes were: access to finance, employment generation and health improvement, followed by education and income growth/livelihoods support
- Top targeted environmental impact themes were renewable energy, energy efficiency and clean technology.
New entrants to the market
GIIN outline that in the past few years, major institutional investors, such as Zurich Insurance and AXA Group, have entered the impact investing market. In 2015, with impact investing gaining traction, additional institutional investors got involved:
- BlackRock Inc. announced the creation of BlackRock Impact
- Bain Capital, LP announced the formation of a new unit focused on impact investing
- Goldman Sachs Asset Management announced that it would acquire Imprint Capital, an investment advisory firm exclusively focused on impact investing, in order to increase its capacity and opportunities in impact investing and
- HESTA announced a partnership with Social Ventures Australia to launch the Social Impact Investment Trust.
State of the impact investing market
Results from the survey detailed significant progress was noted in the areas of “research and data on products and performance”, “professionals with relevant skill-sets” and “high-quality investment opportunities (fund or direct) with track records”.
One respondent commented on the Social Impact Investment Taskforce established under the UK presidency of the G8 in 2014 saying: “[We’ve seen] higher interest from all types of investors, [and] launching of an international community [which is] reassuring for the sector”.
The two most critical challenges to industry growth identified by respondents in 2015 are echoes of what has been identified for the past 3 years: “lack of appropriate capital across the risk/return spectrum” and “lack of high-quality investment opportunities (fund or direct) with track record”. Nevertheless, a majority of respondents also saw at least some progress in these two areas.
Respondents indicated both financial and non-financial motivations for allocating capital to impact investments. The top 3 were: “a commitment to responsible investment”, “a desire to meet impact goals” and “response to client demand”.
Of 17 survey respondents who commented on their due diligence process for impact investments: 8 said it was the same as their conventional investments, 5 said it was more or less the same and 4 said it was different. For those that said it was different it was noted that this was in areas such as: assessment of risk and return, use of different consultants and evaluation of impact.)
As of the end of 2015, 156 respondents to this year’s survey collectively managed $77.4 billion in impact investing assets. Responses detailed that impact investors made investments all over the world with roughly half of assets under management being in developed markets and half in emerging markets.
The Global Impact Investing Network (GIIN) is a nonprofit organisation dedicated to increasing the scale and effectiveness of impact investing. The GIIN builds critical infrastructure and supports activities, education and research that help accelerate the development of a coherent impact investing industry. J.P. Morgan continues to support this survey carried out by GIIN as an anchor sponsor and the study was also produced with support from the U.K. Government through the Department for International Development’s Impact Programme.