Impact Managers Growing in Scale, Diversity: Research

Impact investment specialists now manage more than $122 billion in total assets, according to manager rankings from ImpactAssets.

The US-based impact investing firm gathered data from 163 asset managers specializing in impact investing — the 12th time it has done so — and found that the number of companies running more than $1 billion had grown when compared to 2022’s report.

The number of investment firms running more than $500 million had also grown, ImpactAssets stated in its “IA 50” report.

The IA 50 is a database of impact managers whose applications are reviewed by ImpactAssets’ selection committee. The approved applications are then sorted into three categories: core, emerging — for newer impact managers — and an Emeritus list, for those firms with established track records.

The organization also highlighted the “maturing” nature of the impact investment sector, with 43% of companies surveyed having been managing impact assets for more than a decade.

Jed Emerson, chief impact officer at AlTi Global who chaired the committee reviewing the applications, said: “This year’s IA 50 showcase is a watershed, as the industry continues to allocate more investable assets into social and environmental solutions with both time-tested strategies and creative, new approaches.

“Established funds continue to impress, while new funds are bringing fresh approaches and insights that move the needle in critical areas through impact investing.”

ImpactAssets’ work also found that impact investment managers tended to have far more diverse teams than the broader asset management industry.

According to the database, 48% of fund managers said their investment teams were made up of 50% or more people of color, while 43% said their teams had 50% or more women.

Impact investment managers were most likely to focus on clean or alternative energy or other climate change-related strategies, with a quarter of all managers working in this area. Micro-finance and other financial services impact strategies was the second largest area of focus with 12% of managers specializing in this area.

Six in 10 companies included in ImpactAssets’ database were private equity managers, with 32% primarily investing in private debt.