Impact investing get a B+ on its annual report card

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The topline number of $114 billion in impact assets under management got most of the headlines, including from ImpactAlpha, after the release last month of the seventh annual impact investor survey from the Global Impact Investing Network.

We go behind the headlines and pick apart the report in our latest Returns on Investment podcast. The conclusion of our Returns on Investment roundtable discussion: impact investing has to get both bigger and better, and fast.

“There are people doing a lot of little deals. You don’t have that many significant transactions of size,” says Imogen Rose-Smith, senior writer with Institutional Investor magazine. Of the $12 million median deal size, she sniffed, “In my world, that’s not real investing.”

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Pessimists can protest that even $114 billion (reported by 208 investors) is a rounding error in the global financial markets. Optimists can point to the growth, and major new entrants. This year’s total represents an increase of 47 percent from $77 billion in total assets (reported by 158 investors) in 2015 and 90 percent from $60 billion in assets (reported by 146 investors) in 2014.

Even that growth raises questions. Nearly all the investors surveyed by the GIIN reported satisfaction with the impact performance of their investments. That suggests either extraordinary effectiveness, or a low bar for proving out impact.

Our roundtable tried to sleuth out perhaps the most intriguing tidbit in the GIIN’s report: that five unnamed investors accounted for nearly $50 billion, or 44% of the $114 billion total. ImpactAlpha’s tipline ([email protected]) is open for any mega impact investors that want to step forward.

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