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Impact Investing Market


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The impact investing market is expected to grow from an estimated value of USD 135 Billion in 2015 to USD 307 Billion by 2020, at a CAGR of 17.86% from 2015 to 2020. The global market is set to witness a significant growth, due to increase in demand for impact capital, growing ecosystem support and impact readiness. Principal capital providers include development banks and investment funds. Lately, other institutional investors, such as pension funds and insurance companies, have grown their stake significantly. However, the marginal presence of retail investors indicates that the market is yet to see financial broadening and deepening.

In impact investment, the main asset classes are private debt and private equity constituting about 75% of the overall asset pie. Asset classes are getting diversified with the introduction and launch of innovative financial instruments such as social impact bonds; development impact bonds; green bonds; and other quasi-equity, quasi-debt hybrid products. Most impact investment companies are privately held, without any offload to public or retail investors.

There is growing convergence within impact investing spectrum - with Global Impact Investing Network’s (GIIN) definition gaining larger acceptance - enabling the social and environmental impact to co-exists with financial returns. Rather, in many developing countries, social impact businesses have scaled to reach market-based returns.

Impact Investing Market

The U.S. is the largest impact investing market in the world. Institutional investors and fund managers particularly private equity lead the impact investing space in the U.S. Activities such as First B Corp Legislation, the Affordable Care Act and Jobs Act in 2010, and beginning of the First Pay for Success project in New York City are shaping the impact investing space in the U.S. Growing interest by foundations in mission investing supplementing their grant-making by using a portion of their endowment for loans and investments to support their impact missions is driving the market.

Some of the key asset owners in impact investing market are Triodos N.V. (Netherlands), Sarona (Canada) and Omidyar (U.S.), while key asset managers are RISE (Canada), Leapfrog (U.K.), responsAbility (Switzerland) and Acumen (U.S.). Revolution Foods (U.S.), Vestergaard Frendsen (Denmark), Vasham(Indonesia) and Waterhealth International (U.S.) are some of the impact enterprises and key enablers in this market are Intellecap(India), Unitus(U.S.), LAVCA(U.S.) and GIIRS(U.S.).

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