Impact investing evolution?

Impact investing -- an investment approach that intentionally seeks to generate a measurable social impact as well as a financial return -- is gaining greater attention from "mainstream" investors, according a recent article by David Bank in Impact Alpha.

While the precise definition of "impact investing" may still be the subject of some debate, it's hard to argue against the statement that Goldman Sachs' acquisition of Imprint Capital "could signal that the impact investing market has graduated from the white-papers-and-conferences stage to become a core part of the banks’ client-retention strategies and asset-management offerings." Bank also points out that Goldman decided to buy an existing specialist asset manager rather than building up it's own in-house capability, suggesting that other smaller funds specializing in impact investment may become acquisition targets.

With these new dynamics, it's reasonable to ask what this might mean for the future direction of impact investing -- will managers' approach change? Will the mix of institutional vs. family investors shift at all? Will the number of funds and/or the amount of capital directed towards social businesses increase?

Finally, we will be interested to see how these issues play out where it matters most -- among the businesses striving to create a social impact, and the communities in which they operate.

Image source: Impact Alpha

-- Clara Shen

 

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