The Global Impact Investing Network (GIIN) recently released its 2016 Impact Investor Survey, the sixth edition of its annual ‘state of the market’ assessment. The 158 respondents, including fund managers, financial institutions, foundations and family offices representing $77.4 billion assets under management (AUM), expect to increase their capital committed to impact investing by 16%, to $17.7 billion.
The respondents also indicated notable improvements in some aspects of the field’s development, particularly in “professionals with relevant skillsets,” “research and data on products and performance,” and “sophistication of measurement practice.”
These are important indicators of progress. I still refer new entrants to Monitor Institute’s seminal 2009 report on the impact investing field. The report provided an assessment of the industry, as well as a prescription for effectively catalyzing its growth. At the time, impact investing was deemed to be on the verge of young adulthood, just emerging from “uncoordinated innovation” into “marketplace building,” a time of infrastructure development necessary to decrease transaction costs and increase efficiency.
More capital, talent, data and impact measurement tools are critical components of this infrastructure development. Increasing capital commitments, including those from mainstream finance entrants, are also promising signs of gears starting to turn. Yet the market is still far from a well-oiled machine – the same three items remain at the top of respondents’ list of industry growth challenges:
• Appropriate capital across the risk/return spectrum, especially early-stage capital
• High-quality investment opportunities with track record
• Suitable exit options
Enter Investors’ Circle! The role of our mission-driven organization is to catalyze the flow of capital to early-stage impact enterprises, the foremost need identified by the GIIN respondents. Our team and members are effectively attracting and identifying high–quality, early stage investment opportunities in the midst of a noisy marketplace, and connecting them with investors who share their impact and growth goals. I’m thrilled to report that we’ve crossed the 300th investment milepost, reflecting more than $200 million of investment for impact!
While we continue to generate “traditional” exits, providing further proof points of the ability to do well by doing good, we are also supporting the development of new exit approaches. On June 9th in New York and June 22nd in Denver, we’ll host two more Structured Exits workshops, allowing investors to engage with each other and new structuring tools for early stage impact investments. The previous two have sold out, so if you’re interested, be sure to register today. We are furthering the field by expanding our perception of early-stage capital, growth trajectories for high-quality opportunities, and suitable exit options.
As the industry continues to make progress, I look forward to the day when our nonprofit organization can cease and desist in the midst of a well-functioning impact investing marketplace. Until then, we’ll continue connecting innovative, inspiring investors and entrepreneurs who are forging the way!