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From the Margins to the Mainstream
Report

From the Margins to the Mainstream

Assessment of the Impact Investment Sector and Opportunities to Engage Mainstream Investors

World Economic Forum Investors Industries, prepared in collaboration with Deloitte Touche Tohmatsu
World Economic Forum, 2013
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Editorial Rating

8

Qualities

  • Analytical
  • Scientific
  • Overview

Recommendation

Many investors believe that they must forego profits to advance social or environmental goals with their investments, but the World Economic Forum’s Michael Drexler and Abigail Noble say otherwise – advancing good causes and earning good returns can go together. “Impact investing” is a relatively new investment approach that seeks to generate financial returns and to have measurable, positive social effects. This report presents a well-organized, balanced view of impact investing and addresses its obstacles and benefits. getAbstract recommends this intriguing study to foundation executives, family offices, private equity firms, asset managers, institutional investors and high-net-worth individuals considering impact investments for their portfolios.

Summary

Assessing the Landscape

“Impact investing” seeks to generate a financial return and to have a measurable, positive social impact. This investment niche accounted for an estimated $40 billion in assets under management worldwide in 2013. Family offices, pension funds and insurance companies find that attempting to drive social change can augment their philanthropic efforts, and affirmatively affect such issues as climate change and economic inequality.

The demand for investments that address social and environmental issues is likely to increase. Impact investing offers a unique niche with particular appeal to the wealthy. High-net-worth individuals and family offices currently lead the way in impact investing, since these investors are interested in shaping environmental and social issues as well as earning good returns.

Impact Investing Growth

A 2010 report from JPMorgan and the Rockefeller Foundation found that impact investing could expand to $1 trillion in assets by 2020. In order to gain popularity, impact investing must reach beyond the relatively small world of the wealthy and of family offices. It must also find acceptance among larger institutional...

About the Author

Michael Drexler is senior director and head of investors industries at the World Economic Forum USA, where associate director Abigail Noble heads impact investing initiatives.

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