Social Impact Investing Reached $12.7B in 2014; UPenn Announces SII Partnership

One hundred Twenty-five  impact investors worldwide reported plans to increase impact investing commitments by 19 percent in 2014, from 10.6 billion in 2013 to 12.7 billion in 2014, according to a J.P. Morgan-Global Impact Investing Network (GIIN) info brief – Impactbase Snapshot: An Analysis of 300+ Impact Investing Funds. The report provides an overview of over 300 funds operating across three key themes: geographic focus, asset class type, and target impact theme. The data for this study was collected from ImpactBase platform – an online database of over 300 social impact investment (SII) funds. Key statistics include:

• Approximately 25 percent of funds analyzed invest in only North America (82) while 52 invest across multiple emerging market continents;
• Nearly half the funds on ImpactBase have a social focus (151), while 42 funds have an environmental focus;
• Almost 70 percent of SSI funds on ImpactBase were launched after 2009;
• Ninety-six percent of ImpactBase funds use performance metrics to quantify their social and environmental impact, over half track IRIS-compatible metrics; and,
• Almost 15 percent of funds are focused on making an environmental impact.

The report also includes data on four asset classes:

• Fixed income – 14,644 investments as of 2014 with 8,093 exits (55.3 percent of deals had exits);
• Private equity/venture capital – 975 investments with 139 exits (14.3 percent of deals had exits);
• Real assets – 228 investments with 4 exits (1.8 percent of deals had exits); and,
• Multiple investment instruments – 2,107 investments with 269 exits (12.8 percent of deals had exits).

The GIIN info brief also includes data on SII funds’ ability to reach target returns and their fundraising sources.

The Organization for Economic Co-operation and Development (OECD) also recently released a report on SII, titled Social Impact Investment: Building the Evidence Base. The report was developed to provide a framework for assessing the social impact investment market and provides recommendations that will strengthen the growing industry.  It also highlights the importance of further international collaborations in developing global standards on definitions, data collection, impact measurement and evaluation of policies as well as experience sharing between players in the market.

In an effort to become a leader in the development of the next generation of impact investment professionals, the University of Pennsylvania’s Wharton School announced a new partnership with OurCrowd, the world’s largest and most active equity-based crowdfunding platform, and Locust Walk Impact Partners – an investment firm focused on SII. The collaboration is intended to provide Wharton School students with experiential training in impact investment through an online crowdfunding platform and to greatly expand the investment capacity of the student-run Wharton Social Venture Fund (WSVF), an SII fund operated under the Wharton Social Impact Initiative.

Active since 2008, WSVF will become the largest student-led SII fund in the country due to this new collaboration. Through WSVF, Wharton School students engage in strategy and co-investment projects with an approach focused on companies in education, energy, health and wellness, food and nutrition, environmental sustainability, and financial inclusion. Read the announcement…