The size of the impact-investing market, or assets devoted to investing to achieve positive social and environmental impact as well as a financial return, stood at $715 billion in April, according to the Global Impact Investing Network (GIIN), an industry group.
That compares to $502 billion in April of 2019, a 42.4% increase that reflects both asset growth and an increase in the number of organizations that GIIN includes in its annual estimate. The survey covered 294 respondents, including 79 repeat respondents that completed the survey in 2016. Some 61% of the organizations surveyed are exclusively impact investors; the rest also make non-impact investments.
About 60% of the survey respondents target both social and environmental impact, with many using the U.N. Social Development Goals as the framework to measure progress. On average, respondents target eight different themes aligned with the SDGs.
Investors allocated capital across the spectrum. At 37% of assets, private debt attracted the most capital, followed by publicly traded debt at 24%, and private equity at 16%. About 55% of impact investments are in developed markets while 40% are allocated to emerging markets.
In terms of financial performance, 88% of respondents reported meeting or exceeding their financial expectations, GIIN reported. Meanwhile, 99% of respondents said they met or exceeded expectations since inception.
Most respondents said they were “unlikely” to change the volume of capital they planned to commit to impact investments, despite the Covid-19 virus. Almost half expect impact performance in line with their expectations this year, but 46% expect underperformance against financial expectations. “Many investors have and will continue to turn to impact investing to contribute to social and environmental solutions,” Amit Bouri, CEO of the GIIN, said in a statement.
Impact investing has been a growing corner of the sustainable investment universe, and investors lately have been especially interested in financing companies directly involved in addressing the coronavirus pandemic. By the end of the second quarter of 2020, according to ImpactAssets, investments made through the ImpactAssets donor advised fund, or DAF, will exceed $143 million, more than total investments made in the fund all of last year.
Write to Leslie P. Norton at leslie.norton@barrons.com
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June 11, 2020 at 06:00PM
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Impact-Investing Market Expands to $715 Billion, Survey Says - Barron's
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