Impact investing is sometimes difficult to define because investors have targeted different impacts that they would like to make, and have also taken many different approaches to making an impact. Almost all of the survey respondents had embraced measurements of social and environmental performance using proprietary metrics, qualitative information and generally accepted metrics.
According to the survey, nearly one-third of impact investors have deliberately targeted below-market rate returns. Private debt is the most common impact investment instrument, comprising 41 percent of respondents’ assets, followed by private equity, 27 percent, and real assets, 27 percent.
Nevertheless,98 percent of respondents told GIIN that their investments had met expectations for impact, and 91 percent felt satisified with financial performance.
Impact investment products are no longer an easy way into the asset management industry. With so much recent proliferation in the space, new ETF sponsors and indexers will have to find other ways to differentiate themselves and to capture investors’ interest, according to the report.
While impact investing first caught on in Europe, eventually making its way to American institutional and then retail investors, GIIN said that it is now a fully international affair as more countries, and more investors, are interested in sustainable development and climate change mitigation.
Still, most impact investors come from the U.S. and Canada, 46 percent, and Europe, 32 percent.
The 2017 Annual Impact Investor Survey contacted 209 respondents in December and February. To be included, respondents either managed at least $10 million in impact investment since their inception, had made at least five impact investments total, or both.