Press Release – NEW YORK, November 14, 2017 – A growing body of data sheds new light on the promising financial performance of impact investments. A new report, GIIN Perspectives: Evidence on the Financial Performance of Impact Investments, published today by the Global Impact Investing Network (GIIN), provides investors with a comprehensive review of available research to date on the financial performance of impact investments. In addition to describing each study, the report synthesizes findings across available research by asset class and surfaces implications for the industry.
Key findings include:
The report evaluates over a dozen studies on the financial performance of funds in three common asset classes in impact investing: private equity, private debt, and real assets, as well as individual investor portfolios allocated across asset classes. Insights were derived from studies produced by a wide range of organizations, including Cambridge Associates, McKinsey & Company, Wharton Social Impact Initiative, Boston Consulting Group, Symbiotics, EngagedX and Impact Investing Australia, as well as the GIIN, among others.
“Increased transparency around financial performance will enable current players to make more informed portfolio allocation decisions, allow new players to more confidently develop market entry strategies, and allow both to set well-informed performance expectations and more accurately evaluate performance,” said GIIN Research Director Abhilash Mudaliar. “To continue to advance and exponentially scale the industry, active impact investors and other field-builders need to embrace an openness to sharing data on the financial and impact performance of their investments, either directly with the public or by contributing to third-party research.”
The report also identifies gaps in current financial performance research and suggests that future analyses should include: target financial returns across strategies and investors’ abilities to meet them; the performance and role of below-market capital across asset classes; fund and investment performance across asset classes at a more granular geographic and sector level; and the relationship between impact objectives, impact measurement and management practice, and financial returns.
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