By Astrid Zweynert
SAN FRANCISCO (TrustLaw) - A database of fund managers who invest for maximum social, environmental and financial impact shows that assets under management grew 15 percent compared to last year to $10.2 billion.
ImpactAssets, a nonprofit financial services company, compiles its annual ImpactAssets 50 (IA50) as a resource for advisors and investors seeking to respond to the growing demand for investment opportunities that deliver both financial and social or environmental returns.
“Impact investing is an enormous opportunity for people not only to get a return on their investment, but to also help make an impact on major societal needs at the same time, the two can go hand in hand, “ said Jed Emerson, ImpactAssets' chief impact strategist and chair of the ImpactAssets 50 selection committee as he released this year’s IA50 at SOCAP 12, an annual conference dedicated to increase the flow of capital towards social good.
The list includes microfinance leaders such as Accion and the Grameen Foundation USA, as well as Calvert Foundation, the not-for-profit arm of the socially responsible investment company. But the list also includes mainstream firms such as Bank of America/Merrill Lynch Capital Access Funds Management.
Impact investments are investments made into companies, organisations and funds with the intention to generate positive measurable social and environmental impact alongside a financial return.
There is increasing demand for impact investing as a recent report by the Calvert Fund said that 72 percent of financial advisors expressed interest in offering such products to their clients.
A report by the Rockefeller Foundation showed that almost $4.4 billion was invested in 2,200 impacting investing deals in 2011, amost twice as many as in 2010.
“We have seen firsthand the growing interest in investments that have both financial and social ROI (return on investment),” said selection committee member Kathy Leonard, vice-president and senior portfolio manager at UBS Financial Services. “Impact investing has emerged as the dominant global trend that will drive future financial market opportunities.”
ImpactAssets stresses that the IA 50 is not an investable index, nor a ranking by performance or assets, but an attempt to show first-time investors the breadth and depth of firms working in the field.
In order to be considered for this year’s IA 50, fund managers needed to meet multiple critieria including having at least $5 milion in assets under management, more than three years experience with impact investing and demonstrated commitment to impact.