Alt Investments
Impact Investing Database Shows Record AuM

Impact investing has been a growing area. Money is put to work to achieve a specific result, such as cutting criminal reoffending and poverty, improving an environment and education. Crucially, the process is also designed to deliver some kind of monetary return.
The total size of assets managed to have a specific impact, such
as curbing poverty, improving an environment or education,
reached a record $228 billion in 2020, rising from $181 billion a
year before, a directory that is used by family offices and other
financial bodies has reported.
ImpactAssets has
released ImpactAssets 50 2021 (IA 50), a free online
database for impact investors, family offices, financial advisors
and institutional investors. This is the 10th edition of the IA
50.
Some 13 managers selected in the latest study reported assets
exceeding $1 billion. By comparison, in the IA 50’s inaugural
year, assets totaled just $6.8 billion, ImpactAssets said.
Impact investing has been a growing area. Money is put to work to
achieve a specific result, such as cutting criminal reoffending
and poverty, improving the environment and education. Crucially,
the process is also designed to deliver some kind of monetary
return. It should not be conflated with philanthropy, and differs
from the currently popular theme of environmental, social and
governance-themed (ESG) investing.
The organization’s Emerging Impact Manager list, which
debuted in 2020 and spotlights newer fund managers that
demonstrate potential to create meaningful impact, also saw
significant growth. The number of emerging fund managers across a
variety of themes and geographies included in this year’s list
grew to 41, up from 16 managers. Total AuM increased to $917
million, up from $397 million last year.
“When we launched the IA 50, we knew there was tremendous
potential for impact investing, but realized many interested
investors weren't aware of the incredible range of impact fund
managers available to them. As the field has evolved, we have
also become aware of the large number of innovative fund managers
not identified via our traditional networks," Jed Emerson,
ImpactAssets senior fellow and IA 50 Review Committee chair,
said. “More recently we have expanded the lens of our process to
capture more breadth and diversity of impact fund managers and in
doing so have also chronicled the progress made by impact
investors as well as the work that still needs to be done.”
Seven Community Development Financial Institutions (CDFIs) were
selected in this year’s IA 50, reflecting the critical role CDFIs
have played during the COVID-19 pandemic—from distributing PPP
loans to supporting small businesses within rural, indigenous and
low-income communities, and communities of color. These
organizations represent both national and locally-focused
community funders and manage a combined $18.7 billion in
assets.
The directory added a new Emeritus category this year
highlighting 27 managers with a combined AuM of $8.8 billion.
These fund managers have been on the IA 50 for at least five
years; 10 managers have been on the list for all 10 years of the
IA 50's existence.
In 2020, the global pandemic and subsequent economic downturn
affected communities worldwide, and IA 50 fund managers focused
on some of those hardest hit. A total of 63 per cent of managers
targeted investment in rural communities, while 54 per cent
specifically benefited people of color and 48 per cent were
focused on advancing women-led businesses. Two-thirds (67 per
cent) of managers said that their firm focused on underdeveloped
markets where the market is relatively new, emerging or subject
to systemic challenges.
While fund management remains overwhelmingly non-diverse, IA 50
fund managers are leading with diversity. This is especially true
of the IA 50 Emerging Impact Managers, where 51 per cent reported
that more than half of their investment professionals were women
and 54 per cent said more than half of their investment
professionals were people of color.
A total of 87 per cent of IA 50 fund managers targeted market
rate or above rates of return and 92 per cent delivered either in
line or above their target returns.
The IA 50 is not an index or investible platform and does not constitute an offering or recommend specific products.