Finkelman Adds Insight to the New GIIN Report on the Size of the Impact Market
With impact investing on the rise, the Global Impact Investing Network (GIIN) has taken on the bigger challenge of trying to measure the market. GIIN’s new study reveals that amid growing interest, investors have relatively small impact portfolios.
Jeff Finkelman, senior research associate, impact investments, discussed this trend with Lara Kreutzer in her Wall Street Journal article, “Kreutzer’s Take: Taking Stock of Impact Investments.”
Finkelman notes that, historically, many impact investment firms’ efforts lie in earlier-stage deals. “We see a lot of venture-oriented impact strategies, which means they’re writing smaller checks,” he says.
The study estimates total assets invested in impact deals at the end of 2018 at $502 billion. Of note, the median amount of impact investment assets under management was only $29 million, compared with average AUM of $452 million. Finkelman also notes that “there are a handful of [those] managers with several funds under their belts that are growing in size, but it’s going to take time.”
The larger average reflects the presence of a limited number of investors with large portfolios, according to the study. Among them are development finance institutions, which are estimated to account for 27% of total assets invested, and asset managers, which represent more than half of total AUM, according to the study.
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Jeff Finkelman, CFA, senior research associate, impact investments, focuses on socially-responsible, ESG, and impact investing across asset classes. Jeff previously worked for the US Small Business Administration with the office of Investment and Innovation.