Last year, 146 of the world’s largest impact investors reported $10.6 billion in commitments to impact investments, with plans to commit 16% more in 2015, according to a new report from the Global Impact Investing Network and JPMorgan Chase & Co.
Survey participants, including fund managers, banks, development finance institutions, foundations and pension funds, collectively managed $60 billion in impact investment assets, 35% of which was proprietary capital and 65% managed on behalf of clients.
Each participant in the study either managed at least $10 million in impact assets or had committed capital to at least five different impact transactions. The survey did not include individual investors.
Asset Allocations and Performance
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According to the report, investments directly into companies represented 74% of respondents’ assets under management, and indirect investments just 20%.
Housing accounted for 27% of respondents’ assets under management, and microfinance and other financial services combined another 27%. Following that, 10% was allocated to energy, and 5% each to health care and food and agriculture.
Respondents indicated that the latter three sectors would most likely experience increased allocations this year.
The survey found that allocations continued to be primarily in private markets, with 40% of assets invested through private debt, down from 44% last year, and 33% through private equity, well up from 24%.
Capital was diversified across regions, with about half invested in emerging markets and half in developed markets.
The largest number of investors planned to increase their allocations to sub-Saharan Africa, followed by east and southeast Asia, and Latin America and the Caribbean.
Survey participants said their portfolios were generally performing according to both their impact expectations and financial return expectations.
Twenty-seven percent of respondents reported outperformance against their impact expectations, and only 2% reported underperformance. In addition, 14% saw outperformance against their financial return expectations, while 9% said they had experienced underperformance.