impact investing and blended finance - p&i events · based institutions, racial and ethnic...
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Impact investing andblended finance
Wouter Koelewijn
European Liaison, Global Impact Investing Network (GIIN)
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What is Impact? – The UN’s Sustainable Development Goals (SDGs) as common framework
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What is impact investing?
Impact investments are investments made
with the intention to generate positive,
measurable social and environmental
impact alongside a financial return.
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What is impact investing? (2)
Impact investments can:
• be made in both emerging and developed markets; and
• target a range of returns from below market to market rate, depending on investors’ strategic goals.
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Core characteristics of impact investing
Impact investments have:
• the intention to create impact
• the expectation of a financial return
• measurement and management of impact
• application across a range of asset classes.
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Who is making impact investments?
• Fund managers
• Development finance institutions
• Diversified financial institutions/banks
• Private foundations
• Pension funds and insurance companies
• Family offices
• Individual investors
• NGOs
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The Global Impact Investing Network (GIIN)
• The GIIN is a non-profit organization dedicated to increasing the
scale and effectiveness of impact investing.
• Founded in 2009, the GIIN builds critical infrastructure and
develops activities, education, and research that can increase
the scale and effectiveness of impact investing around the world.
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GIIN helps industry scale and effectiveness
Investors and investees need a
consistent way of measuring
social and environmental performance
IRIS & Impact Measurement and Management (IMM)
Many investors need to better understand impact investing
Research and Communications
Global impact investment industry needs leadership, organization, and sharing of best practices
Investors’ Council and Network Membership
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www.thegiin.org/research
GIIN Annual Impact Investor Survey
Edition 2019
What does impact investing look like globally ?
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Together, respondents invested USD 35 billion into over 13,000 impact investments during 2018
14%
0,5%
1%
10%
11%
14%
16%
34%
Other
Deposits & cash equivalents
Equity-like debt
Real assets
Public equity
Private equity
Public debt
Private debt
Percent of capital invested (excl. outliers)
Source: 2019 GIIN Annual Impact Investor Survey; n = 261. Excludes two outliers and three respondents that did not report 2018 investment activity.
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Impact investors allocate AUM globallyPercent of AUM
Source: 2019 GIIN Annual Impact Investor Survey; n = 259. Excludes three outliers and three respondents that did not share AUM data.
6%
2%
4%
5%
5%
6%
6%
10%
14%
14%
28%
Other
MENA
Oceania
East Asia
South Asia
Southeast Asia
EECA
WNS Europe
SSA
LAC
U.S. & Canada
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Impact investors have varied impact and financial goals and report generally strongperformance.
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Respondents target a wide range of impact themes
Note: ‘Other’ themes include affordable and safe housing, sustainable technology, cybersecurity protection, strengthening of faith-based institutions, racial and ethnic equity and inclusion, circular economy, and SME development.
Source: 2019 GIIN Annual Impact Investor Survey.
73%
61% 59% 58% 55%50% 50% 50% 49%
42% 41% 40% 38% 37%27%
21% 18%
6%
Per
cen
t o
f re
spo
nd
ents
Targeted SDG-aligned impact themesn=252 (optional question)
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Respondents target a range of financial returns
Source: 2019 GIIN Annual Impact Investor Survey
66%
19%
15%
Respondents’ target financial returns
Risk-adjusted, market-rate returns
Below-market-rate returns: closer tomarket rate
Below-market-rate returns: closer tocapital preservation
n=266
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Respondents report strong performance relative to expectations
Source: 2019 GIIN Annual Impact Investor Survey
2%9%
82%77%
16% 14%
Impact expectations Financial expectations
Per
cen
t o
f re
spo
nd
ents
Respondents’ performance relative to expectations
Underperforming In-line Outperforming
n=254n=253
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Spectrum of capital
Source: Bridges Ventures
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Exciting growth, but much more needed for the Sustainable Development Goals
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Defining Blended Finance:
Catalytic capital from public
or philanthropic sources to
increase private investment
in developing countries for
SDGs and global
development impact
Blending public and private capital
Source: Convergence, 2019
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Goal of Blended FinanceTo create acceptable risk-return profiles, to mobilize private sector investment
into SDG projects in developing countries
Source: Convergence, 2019
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Key regions of blended finance
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Focus sectors of blended finance
