Future Returns: Impact Investing in Latin America
By Rob Csernyik
Latin America, a region of over 630 million people, has emerged as a space for impact investors to seek market-rate returns. Home to eight of the 20 countries across the world with the highest income inequality, below average public health expenditures as a proportion of GDP, and ridden with hasty, unplanned urbanization, there is a budding class of entrepreneurs trying to reshape life in the region.
Though the region’s impact investing market is still emerging, with assets under management of only about US$4.7 billion, it’s seeing rapid growth. An annual review from the Association for Private Capital Investment in Latin America (LAVCA) found that venture capital investments in startups grew four times, from US$500 million in 2016 to a record US$2 billion in 2018. While the association can’t say exactly how much is specifically impact related, Natalia Valencia, LAVCA’s associate director of Research & Responsible Investment says the trend is an upward one for that sector.
Photo courtesy of Bruno Locatelli / CIFOR.