A decade into the impact investing industry’s formal creation, the industry “is becoming increasingly established and professionalized, but also a market that is complex and diverse,” according to Amit Bouri, cofounder and chief executive of the Global Impact Investing Network.
GIIN’s latest annual survey, released Wednesday, shows that in 2016, 209 leading impact investors committed a total of $22.1 billion into 7,951 impact investments, and planned to increase capital invested this year by 17% and the number of investments by 20%.
Survey responses were collected between December and February. In total, the 209 investors managed nearly $114 billion in impact investing assets, a figure that serves as a best-available floor for the size of the impact investment market, according to GIIN.
GIIN recently reported that impact investors were using financial guarantees as a credit-enhancement tool to stimulate increased private-sector investment in solutions to a wide range of challenges.
Ninety-eight percent of respondents in the new annual survey said their investments had either met or exceeded their expectations for impact, and 91% expressed satisfaction with financial performance.
While 66% of respondents targeted risk-adjusted, market rates of return, 18% sought below-market-rate returns that were closer to market rate, and 16% looked for returns closer to capital preservation.
Roughly four out of five survey participants agreed that below-market-rate capital plays a valuable role in impact investing, including its ability to mitigate risk of investments to attract new investors, act as a bridge between philanthropy and market-rate capital, and capitalize opportunities that may never lend themselves to risk-adjusted returns.
The main sectors to which respondents allocated capital last year were housing (22%), energy (16%) and microfinance (12%). By geography, 40% of assets went to the U.S. and Canada, 14% to Europe, 10% to sub-Saharan Africa and 9% to Latin America and the Caribbean.