Impact Investing 2.0: The Way Forward – Insight from 12 Outstanding Funds

PCV InSightImpact Investing, InSight, Publications

“Impact Investing 2.0: The Way Forward – Insight from 12 Outstanding Funds”, created in partnership with the Center for the Advancement of Social Entrepreneurship (CASE) at Duke University and Impact Assets, identifies twelve high-performing funds that have seen both financial and social returns on their investments. This report is designed to be a resource for the broad community interested in the future of impact investing, but especially for impact investing practitioners – those fund managers, investors, entrepreneurs, policymakers and advisors creating and managing new and existing funds and working hard to achieve successful social and financial performance.

In the past few years, we’ve seen impact investing endorsed by some of our biggest financial institutions, taken up by G8 leaders, and receive repeated coverage in major newspapers. But for every pioneer blazing a path forward in impact investing, there are many others waiting at the sidelines.They have indicated they need more robust data about the field’s track record. Equally if not more important, they are waiting for a clear vision of what success looks like. What reasonable combinations of social and financial returns can be expected in diverse segments of the industry?

It is for this reason that Impact Investing 2.0 represents a major step forward for the industry. The twelve funds profiled herein work in vastly different sectors, from microfinance in India to sustainable property in the UK, and have accordingly pursued very different investment strategies and approaches to social impact. Their success across such a broad set of parameters offers many lessons for the industry and beyond.

It should come as no surprise that many of the best impact investing funds do, indeed, apply the most disciplined practices from traditional investment firms. But what makes their performance unique are four themes of impact investing that have been hidden from view and sometimes run counter to popular belief. These four themes are: Policy Symbiosis, Catalytic Capital, Multilingual Leadership, and Mission First and Last. Each theme represents a unique way to drive consistently impressive financial returns, together with outstanding overall management and profound impacts. When the themes are woven together, they offer an exciting way forward for the new funds and current investors who seek to fulfill their fiduciary duties as actors within capital markets that, in years to come, will only continue to change and expand toward deeper, more sustained impact for investors and communities.

Additional Materials and Case Studies