ImpactAssets’ IA 50 Impact Investment Fund Manager Showcase
ImpactAssets recently released its ImpactAssets 50 2020 (IA 50), a publicly available, online database for impact investors, family offices, financial advisors and institutional investors that features a diversified listing of private capital fund managers that deliver social and environmental impact as well as financial returns.
To continue to shine a light on impact fund innovation, the IA 50 added a new Emerging Impact Manager category, which spotlights newer fund managers that demonstrate potential to create meaningful impact. The inaugural list includes 16 emerging fund managers across a variety of themes and geographies.
“With record applicants and assets under management, the IA 50 continues to reflect the rapid growth and interest in impact investing,” said Jed Emerson, ImpactAssets Senior Fellow, and IA 50 Review Committee Chair. “This year’s showcase includes eleven impact funds with more than $1 billion in assets under management. And to ensure we’re capturing the best future ideas, we’ve added emerging impact managers, who have the hunger, creativity and a willingness to explore alternatives that more seasoned fund managers may not.”
The IA 50 2020 saw a record number of private debt and equity fund manager applications. Managers who met the IA 50’s in-depth review criteria manage an estimated $39.8 billion in assets devoted to creating measurable, positive impact, up from $26.9 billion in 2019. Emerging impact managers direct nearly $400 million into cutting-edge strategies and high impact investments.
This Year’s Showcase Includes:
Investment Targets and UN Sustainable Development Goals: A total of 83% of managers targeted investment in people or places that are under threat or lack access to resources and opportunity, while 64% focused on underdeveloped markets where the market is relatively new, emerging, or subject to systemic challenges. Top UN SDG categories that fund managers focused on included 8 – Decent Work and Economic Growth (68%); 1 – No Poverty (63%) and 10 – Reduced Inequalities (58%).
Diversity and Inclusion: While Wall Street continues to struggle with building diverse teams, 85% of IA 50 fund managers report that 25% or more of their investment professionals are women and/or from under-represented groups, while half have teams with 50% or more women and other under-represented groups. In addition, 75% of firms have 25% or more percent management teams that are women or from under-represented groups.
Impact and Financial Return: Impact fund managers remained focused on delivering both positive impact and investment performance, with 78% targeting market rates or above market rates of return. A total of 97% of impact fund managers delivered either in line or above their initial target returns.
Emerging Impact Managers
The newly-introduced IA 50 Emerging Impact Managers category represents fund managers that are in the early stage of their life cycle, and are often taking unique approaches to impact investing. Emerging Impact Managers may have less than $25MM in Assets Under Management and/or been operating for fewer than three years.
Emerging Impact Manager firms were selected according to a set of criteria developed to ensure a diverse set of firms with commitment to impact and representing a range of approaches, asset classes and impact areas. Particular consideration was given to firms that demonstrate a unique strategy, under-represented impact theme and diversity in leadership in view of the application pool.
• The emerging impact managers have an average AUM of $24.8MM. Of this year’s emerging impact managers, 75% were launched in the last three years.
• A quarter (25%) of managers list clean technology, alternative energy and climate change as their investment theme, while 19% are focused on small and medium business development, and 13% list racial equity as their investment theme
• A total of 69% of emerging impact managers report that 50% or more of their investment professionals are women and/or from under-represented groups and 75% report that 50% or more of their board members are women or from under-represented groups.
“As the impact investing field evolves, we can’t lose sight of innovation,” said IA 50 Review Committee Member, Julia W. Szw, CFA, of Julia W. Sze Consulting. “The emerging managers we selected have developed strategies in new sectors and geographies, are often led by women and people of color, and add new depth to the impact investment universe.”
In addition to Emerson and Sze, the IA 50 Review Committee is comprised of an expanded group of 14 impact investment experts and leaders, including Lauren Booker Allen, Vice President, Jordan Park Group Impact Advisory; Mark Berryman, Managing Director of Impact Investing, The CAPROCK Group; Ronald A. Homer, Chief Strategist, Impact Investing, RBC Global Asset Management (US) Inc.; Karl “Charly” Kleissner, Ph.D., Co-Founder of Toniic and KL Felicitas Foundation; Kathy Leonard, Senior Vice President, Investments and Senior Portfolio Manager, UBS; Malaika Maphalala, CPWA® Private Wealth Advisor, Natural Investments, LLC; Cynthia Muller, Director of Mission Investment, W.K. Kellogg Foundation; Stephanie Cohn Rupp, Managing Director and Partner, Tiedemann Wealth Management; Fran Seegull, Executive Director, U.S. Impact Investing Alliance, Ford Foundation; Liesel Pritzker Simmons and Ian Simmons, Co-Founders of Blue Haven Initiative; and Margret Trilli, President and CIO, ImpactAssets.
Sandra Osborne Kartt, CFA, Director, Investments, ImpactAssets and Jennifer Kenning, CEO and Co-Founder of Align Impact and IA 50 Senior Investment Advisor, led the ImpactAssets and Align Impact Investment teams in the application scoring and analysis process.
“The IA 50 is a proven and trusted way for investors to start exploring a subset of managers that are already working in this area and determining what interesting impact investments an investor can make today,” said Osborne Kartt. “We are excited by growing investor appetite as well as the diverse array of impact themes and strategies represented by this year’s list.”
About the ImpactAssets 50 The IA 50 is the first publicly available database that provides a gateway into the world of impact investing for investors and their financial advisors, offering an easy way to identify experienced impact investment firms and explore the landscape of potential investment options. The IA 50 is intended to illustrate the breadth of impact investment fund managers operating today, though it is not a comprehensive list. Firms have been selected to demonstrate a wide range of impact investing activities across geographies, sectors and asset classes.
The IA 50 is not an index or investable platform and does not constitute an offering or recommend specific products. It is not a replacement for due diligence. In order to be considered for the IA 50 2020, fund managers needed to have at least $25 million in assets under management, more than 3 years of experience as a firm with impact investing, documented social and/or environmental impact and be available for US investment. Additional details on the selection process are here.
The IA 50 Emerging Impact Manager list is intended to spotlight newer fund managers that may demonstrate future potential to create meaningful impact. Criteria such as minimum track record or minimum assets under management may not be applicable.
About ImpactAssets ImpactAssets is a nonprofit financial services firm that increases the flow of capital into investments delivering financial, social and environmental returns. ImpactAssets’ $1.1 billion Donor Advised Fund and field-building initiatives enable philanthropists, other asset owners and their wealth advisors to advance social or environmental change through impact investment and philanthropy