Assets Under Management Grew For Impact Investing

December 21, 2016       THE NONPROFIT TIMES      

Impact investors have demonstrated strong growth, collectively increasing their assets under management (AUM) from $25.4 billion in 2013 to $35.5 billion in 2015, a compound annual growth rate of 18 percent. The volume of capital raised by fund managers also increased at a compounded rate of 18 percent each year, growing from $1.7 billion in 2013 to $2.3 billion in 2015.

These are some of the findings from Impact Investing Trends: Evidence of a Growing Industry, the first industry-level trends analysis on global impact investor market activity from the Global Impact Investment Network (GIIN).

The report (available at http://bit.ly/2fUDl42) provides compelling evidence that the impact investing industry is growing, both in terms of size and maturation. Some key findings include:

  • Impact investments are made worldwide, in a diverse range of sectors and using various financial instruments, reflecting the wide variety of impact theses and strategies pursued by impact investors.
  • Impact investors have maintained a steady pace of activity, committing $7.1 billion in 2013, $9.2 billion in 2014 and $9.1 billion in 2015.
  • Certain key geographies, sectors and instruments are particularly common among impact investors. More than 60 percent of AUM was allocated to emerging markets each year, and the top three sectors receiving the highest proportions of AUM were microfinance, other financial services and energy, respectively. Collectively, these three sectors accounted for most of AUM each year.
  • Impact investors are consistently satisfied with both impact and financial performance.
  • The industry is making progress against several key indicators of market growth, despite certain barriers remaining to industry development.