PitchBook’s first analyst note dedicated to impact investing explores key terms, factors and more, encapsulating recent trends within the burgeoning field.
Key takeaways:
• Unlike philanthropic capital, impact investments are made with an express goal to achieve financial returns in addition to positive social or environmental externalities.
• Impact funds are typically smaller vehicles than generalist PE or VC funds, and fund managers tend to focus their strategies in emerging markets. Our data suggests that PE funds concentrate investments in Africa, while VC funds tend to focus more on South Asia.
• 2017 saw over $3.4 billion committed to PE and VC impact funds globally, though more than half of this volume is accounted for by TPG Growth’s $2 billion Rise Fund. We expect that growing interest in impact assets will result in larger impact funds in the coming years, as more major alternative asset managers enter the space.