Social Impact Investing

market rate returns, institutional money started
to flow in and these funds eventually migrated
to the Financial First segment.
As more impact oriented funds demonstrate
market rate returns made from high-impact
platforms, more institutional funds will look
to invest in this sector. This will attract more
funds to be raised, increasing the social impact
that can be achieved. By pioneering investment
in new fund managers and investment
areas, investors with a risk appetite can help
to accelerate this trajectory and seed the next
generation of Impact Investment funds that can
be accessible to Financial First investors.
As more impact oriented
funds demonstrate market
rate returns made from highimpact
platforms, more
institutional funds will look to
invest in this sector.
Clarity is Emerging
The Impact Investment sector is gaining clarity.
Long seen as an investment sector only
for the philanthropic investor, the solid returns
the sector is producing are changing this landscape.
Numerous success stories have allowed
the sector to break down the stereotypes many
mainstream investors had on Impact Investments.
Through using the Asset Allocation Framework
presented in this paper, investors can more
easily navigate around the plethora of options
available. Alongside research like this, developments
are being made in the infrastructure
of the sector. Initiatives set forth by the Rockefeller
Foundation and B Labs are looking to
standardise metrics for measuring the sustainability
or relative impact in an attempt to give
investors tools to compare and contrast their
investment options. These developments in
building a sustainable ecosystem for Impact
Investments are driving the confidence many
institutional investors are starting to gain in the
sector.
Impact Investment is Helping Answer
Challenges and Change the Market
By creating mechanisms through which investors
can both make money and address social
and/or environmental challenges, Impact Investment
offers the potential to expand the
pool of capital available to fund innovative solutions.
Impact Investments often leverage
grants, sometimes in mezzanine financing arrangements
that create a large multiplier effect
on the amount of impact generated. However,
as the examples in this report show, Impact Investors
are not limited to partnering with grant
makers: from tropical rainforest preservation, to
low-income housing development in New York
City, to infectious disease prevention in Africa,
Impact Investors are also making market-rate
returns on investments that fit seamlessly into
their portfolios.
12
Investing for Impact: Case Studies Across Asset Classes