April 17

Private Debt Products Lead Way In Impact Investing, Study Says

By Raymond Fazzi

Private debt and fixed-income instruments have become the most popular tools used by impact investors, with returns that are competitive with mainstream products, according to a new study.

Debt instruments in the impact investing space have also shown themselves to be resilient investments, even with their focus on building economic infrastructure in some of the poorest parts of the world, researchers said.

“The other thing that was very encouraging was the quality of the underlying investments,” said Abhilash Mudaliar, GIIN’s research director. “Write-off ratios … were below 1 percent, which is very encouraging.”

About 34 percent of the $114 billion impact investing market consists of instruments such as private debt income funds (PDIFs) and community development loan funds (CDLFs), according to a report by the Global Impact Investing Network (GIIN) and the impact investing firm Symbiotics. The next largest sectors of the impact investing market consist of real assets (22 percent) and private equity (19 percent), the report said.

Photo courtesy of reynermedia.

Source: Financial Advisor (link opens in a new window)

debt, financial services, GIIN, impact investing, impact investors