Most investors today are interested in making lots and lots of money. And many people, as they earn lots of money, decide to give to charity. But somewhere between pure profit and pure charity is a relatively small but growing movement of investors who seek financial, environmental, and social returns of their investments all at once. They are called impact investors, and their ranks are continuing to grow.
Co.Exist has covered the emergence of the impact investing sector over the last decade, from something that no one had ever heard of to a phenomenon that governments around the world are now working to actively encourage.
The latest annual survey from the Global Impact Investor Network (GIIN) shows this strength. According to the organization, which surveyed 158 major impact investors, there are now at least $77 billion assets under management that qualify as impact investments, and a total of $15 billion committed in more than 7,500 deals in 2015 alone. This is not an estimate of the entire global market, which is difficult to measure, but a good idea of its strength. Importantly, nearly 90% of all respondents said the financial performance of their investments were “in line with or above expectations.”
“The data show impact investing is no longer a nascent market,” writes GIIN CEO Amit Bouri.
It’s hard to compare this data to prior years’ surveys, because the sample sizes were different. Still, the evidence points to slow growth. Prior years showed $60 billion under management in 2015, and $46 billion in 2014.
Impact investing includes many types of investments, ranging from community development funds and social impact bonds to early-stage startup equity. In the survey, private equity and private debt were the most popular forms of investment, with a small number using “pay-per-performance” programs that are receiving some attention from governments today.
The data are based on a survey of 158 impact investors, 80% from developed country markets, including fund managers, foundations, banks, pension funds, and development finance institutions. All represent impact investing organizations that have committed at least $10 million or closed five impact investing transactions.
The survey addressed the activities and needs of large institutions that do this kind of investing, but impact investing is very slowly opening up to less wealthy individuals, says Bouri. For example, in Chicago, the MacArthur Foundation Chicago Community Trust and the Calvert Foundation recently announced a $100 million fund that will lend money to nonprofits and community initiatives that would otherwise struggle. Individuals will be able to contribute to the fund in increments as low as $20.