A new study, released today, found an 19% compound annual growth rates in assets under management between 2013-2015, and found that 85-95% of investors meet or exceed returns expectations each year.
The study, released by the Global Impact Investing Network(GIIN) at the opening yesterday of its two-day Investor Forum 2016 in Amsterdam, found that impact investors reported substantial growth over the last three years. The Impact Investing Trends: Evidence of a Growing Industry report has found that among a consistent sample of dedicated impact investors, both overall assets under management and capital raised by fund managers increased substantially at a compound annual growth rate of 18 percent between 2013 and 2015. Additionally, the study found that up to 95 percent of impact investors surveyed report financial returns at or exceeding expectations and 98 percent met or exceeded impact expectations.
Since 2011, the GIIN’s Annual Impact Investor Survey has provided valuable ‘state of the market’ information on the impact investing industry. This report, based on data provided by 62 repeat respondents to the past three surveys, is the first major report of trends in industry activity and is thus a significant development in tracking growth over time.
Some key findings of the survey include:
• Survey respondents demonstrated strong growth, collectively increasing their impact investing AUM from USD 25.4 billion in 2013 to USD 35.5 billion in 2015, a compound annual growth rate of 18 percent.
• The survey showed a steady flow of activity, with respondents committing a total of USD 7.1 billion to 3,332 deals in 2013, USD 9.2 billion to 3,726 deals in 2014, and USD 9.1 billion to 3,096 deals in 2015.
• The volume of capital raised by fund managers increased at a compounding rate of 18 percent each year, growing from USD 1.7 billion in 2013 to USD 2.3 billion in 2015.
• Financial performance was at or above expectations for 85 percent to 95 percent of respondents each year; impact performance was at or above expectations for 98 percent of respondents.
• Over 60 percent of AUM was in emerging markets and approximately 70 percent of AUM was allocated through private debt and private equity each year.
• The sectors accounting for the highest proportions of AUM were microfinance and other financial services, energy, housing, and food & agriculture.
The GIIN hopes that insights from this research will further the impact investing industry’s reach and impact, enable data-driven decision making, and improve transparency as the market continues to grow.
“The Impact Investing Trends Report provides compelling evidence of a growing impact investing industry,” said Amit Bouri, co-founder and CEO of the GIIN. “The report illustrates that impact investing is a powerful movement driven by investors of all types who are effectively putting their capital towards solutions to issues in areas like conservation, education, and affordable housing. The positive trends support that investors are increasingly bullish about the use of capital to address social and environmental challenges, and we are confident that this trend will continue.”