Global Impact Investor Survey Shows High Levels Of Satisfaction

Tom Burroughes Group Editor 5 May 2015

Global Impact Investor Survey Shows High Levels Of Satisfaction

A global survey involving JP Morgan of the world's largest "impact investors" shows a generally high level of satisfaction with results.

A survey of the world’s biggest impact investors – including banks and pension funds – showed that the overwhelming majority (98 per cent) reported that the social and/or environmental impact of their efforts matched or beat their expectations.

As “impact investing” continues to develop as a theme in the financial world, the survey, called Eyes On the Horizon, by GIIN (Global Impact Investing Network) and JP Morgan, also found that 89 per cent of respondents reported “no significant risk events” last year.

According to one definition, impact investing “aims to generate specific beneficial social or environmental effects in addition to financial gain”. Rather than simply screen out investments deemed harmful or morally wrong, impact investing tries to make a positive impact – hence the name – by for example putting money into enterprises that benefit a specific community.

The GIIN/JP Morgan survey was carried out among 146 impact investors, including fund managers, banks, development finance institutions, foundations, and pension funds, reporting having committed $10.6 billion to impact investments in 2014, with plans to commit 16 per cent more in 2015. The surveyed sample, which manages $60 billion in impact investment assets, indicates satisfaction with both financial returns and social/environmental impact performance, compared to expectations, the report authors said.

The survey, conducted for the fifth year, for the first time looked at private equity exits, providing detailed insights on 77 exits.

Among the findings were that, in total, respondents manage $60 billion in impact investments, of which 35 per cent is proprietary capital and 65 per cent managed on behalf of clients; investments directly into companies represent a much larger proportion of assets under management (74 per cent) than do indirect investments (20 per cent). Other findings showed that housing accounts for 27 per cent of respondents' assets under management, as do microfinance and other financial services combined. Following that, 10 per cent is allocated to energy, while healthcare and food and agriculture account for 5 per cent each.

Other findings are that allocations continue to be primarily in private markets, with 40 per cent of assets invested through private debt and 33 per cent through private equity (44 per cent and 24 per cent respectively in last year's survey); the regions to which the largest number of investors plan to increase their allocations are Sub-Saharan Africa, followed by East and Southeast Asia, and Latin America and the Caribbean; the sectors to which the largest number of respondents plan to increase their allocations are energy, food and agriculture, and healthcare.

The report also found that 99 per cent of respondents measure the social/environmental performance of their investments, with the majority aligning with IRIS, the online catalogue of generally accepted performance metrics that leading impact investors use to measure social, environmental, and financial performance.

The business value of impact performance measurement for improving financial performance of portfolio companies and informing future investments is “very important” to 65 per cent of respondents.


Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes