Our friends over at ImpactBase have published the first analysis of the more than 300 impact funds in the database. Their conclusion: most impact investing funds remain young and hungry.
The analysis, released by the Global Impact Investing Network, which operates ImpactBase, found that a whopping 70 percent have been launched since 2009. Only 13 percent were founded before 2006. Among the 179 funds that reported on committed capital, the average fund has raised less than 50 percent of its fundraising target.
Other highlights of the report (not to be confused with with the annual GIIN/JP Morgan market survey):
- Market rate. ”More than 75 percent of the funds target returns comparable to traditional investments of a similar risk-return profile,” write the report’s authors.
- Composition. Private Equity/Venture Capital funds represent approximately half of the funds profiled on ImpactBase. About 20 percent of funds are fixed income, while 20 percent also invest using multiple instruments.
- Track Record. Over 40 percent of funds in ImpactBase report 3+ years of track record.
- Impact Metrics. Ninety-six percent of ImpactBase funds use performance metrics to quantify their social and environmental impact. More than half track IRIS-compatible metrics.
- Exits. More than half of the fixed-income deals reported in ImpactBase have been exited. This compares with 14 percent for PE/VC and just 2 percent for real assets. (The GIIN notes: The term ‘exits’ should be interpreted in context: In the case of fixed income, an exit could be the repayment of a loan which, for a revolving loan fund for instance, could lead to a high number of reported ‘exits.’)
In a footnote, the GIIN notes the ImpactBase dataset may be biased towards newer funds that are actively seeking investment and may not include many older funds that have not raised additional capital since the database was launched in 2011.