Field Notes: Eyes on the Horizon, the Impact Investor Survey

Field Notes

GIIN and J.P. Morgan have teamed up again to produce their fifth annual global impact investor survey.

 


The Global Impact Investing Network (GIIN) and J.P. Morgan recently released "Eyes On The Prize", the global survey of impact investors. The good news from the report was that investors intend on continuing to increase their exposure to the space in a variety of sectors, from housing and agriculture to energy and micro finance. Survey participants indicated their intention to increase the level of investment by 17 percent over 2014 levels in 2015. Participants also stated their intention to increase the number of deals, with 6,332 planned compared to the 5,404 executed in 2014.

This report makes the fifth annual survey and the largest to date. There was a 17 percent increase in participation as compared from the 2014, and total impact-assets under management among the 146 participants was 60 billion USD. Investors reported using the full range of financial tools to make investments, with the two largest categories being private dept and equity, and the least used financial tool being pay for performance contracts (social impact bonds). There were a variety of investor types represented in the survey with diversified financial institutions/banks, and pension funds/insurance companies making up 32 and 19 percent respectively. Foundations and family offices made up 6 and 1 percent respectively. See the graph below:

 

Impact investors cited several main barriers to increased investment, namely a lack of opportunities across the risk/return spectrum. See this graph for the specific survey questions and responses:

 

Another interesting piece of feedback, consistent with other recent reporting, was that impact investors are garnering returns commiserate with their expectations or better the vast majority of the time. From the report:

Twenty-seven percent of respondents reported outperformance against their impact expectations and 14% reported outperformance against their financial return expectations. Conversely, only 2% reported underperformance on impact, while 9% reported financial underperformance relative to expectations.

This all bodes well for impact investing, assuming deals continue to materialize. Read the full report here.

Click here for more quick reads featuring interesting articles on philanthropy and impact investing.

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