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Impact funds: trends and insights

Phenix Capital is out with their 2024 Impact Fund Universe Report. It’s 32 pages packed with statistics, trends and insights on impact investing globally, and it has a couple of interesting findings this year. 



First the statistics from which their observations are drawn: since 2015 Phenix has tracked over 2,600 individual impact funds that have raised nearly €600 billion in assets, spanning private and public equity and debt (stocks & bonds), real estate, “real assets” (typically physical investments like infrastructure), and other impact areas – possibly the most thorough longitudinal impact database available.


As we discussed in a recent post on impact investing supply / demand imbalance with research by The GIIN, the Phenix data suggests a similar dynamic, with nearly 1,200 funds from 739 impact managers seeking capital in 2023, with funds raising on average just over €390 million each, and most of these statistics have nearly doubled since 2020. Roughly 70% of all impact managers are currently raising money for their funds – a dynamic I suspect some of you see play out in in your email in-boxes. 


However, as we’ve reported on other responsible investing categories, impact asset growth seems to be slowing from an earlier phase…


Nevertheless, it’s also seeing larger and more established investment managers, like Apollo, BlackRock and KKR stepping in with major new fund offerings.


Style wise – just 27% of 2023 new fund launches were dedicated to emerging (developing) markets, 75% are focused on private investments (e.g. equity or debt), while “climate action” funds grew by 70% during the year, representing almost half of all new funds. Overall energy transition and access funds (associated with SDG 7) are the largest single category of funds. We also know some of you are focused on real estate impact investing, which remains a fairly small category with just €19billion raised across a wide group of 87 funds in 2023, not unexpectedly dominated by private debt. There’s more detail on different impact segments and types within the report.


Missing from it, and we’d love to see this data: fee levels and trends for impact funds, statistics on ticket sizes (minimum expected investments), type of return expectations, fund domicile, tenure of the fund managers, data on “dry powder” – an issue today for private equity funds in general – and other information useful for those of us looking to invest in this space.

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