NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, November 21, 2017

Impact investing is capturing the attention of investors across the world. Last year, 209 leading impact investors committed $22 billion to nearly 8,000 impact investments, and planned to increase capital invested this year by 17% and the number of investments by 20%.

Throughout the industry’s development, however, some investors have questioned the ability of impact investments to generate financial returns similar to traditional investments, and lack of data has left this question unanswerable.

Now a new report from the Global Impact Investing Network looks to recent research that it says has shed valuable light on what are appropriate and achievable financial performance expectations.

This research shows that impact investors that target market-rate returns can achieve them. Across the three largest asset classes in impact investing — private debt (34%), real assets (22%) and private equity (19%) — the distribution of fund returns is similar to those in analogous conventional markets.

Photo courtesy of GotCredit.