In 2011, J.P. Morgan and the Global Impact Investing Network (GIIN) published a research report that provides an in-depth analysis of investor perspectives on impact investment and over 2,200 transactions. The report underscores the long-term potential of impact investment and recognises that the market is still in an early stage of development. The research aims at helping to advance a broader understanding of impact investing as an appropriate and economically effective way to complement government aid and philanthropy in solving major social issues
The majority of the 52 surveyed impact investors were optimistic about the impact investment industry and believe that there exists great potential for future growth. They plan to invest approximately US$4 billion over the next year and most of the surveyed investors expect that 5-10 percent of overall portfolios will be allocated to impact investments in just 10 years.
Further, the report finds that investor use of third party systems for impact measurement has increased by 10 percent between 2010 and 2011 and that the biggest challenge the industry is facing is the lack of track record of successful investments. The biggest risks the report identifies are illiquidity and uncertainty of financial returns. To overcome those risks, increased government activity and infrastructure development are crucial as they increase market information and promote growth.
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