This morning we’re excited to release a new white paper that sizes the social impact investing private equity market in the United States at $4 billion. While $4 billion represents a very small segment (.5%) of the broader private equity market in the U.S. ($1 trillion) our findings demonstrate that social impact private equity investing in the U.S. is of growing interest to investors and is on an upward trajectory with more fund managers moving to form funds with dual social and financial objectives.
In our research we examined over 300 General Partners (GPs) within the U.S. and identified 69 GPs which sought some form of social impact and could be seperated into three distinct categories of impact first, double bottom line, and financial first.
Below are five findings from the white paper Market for Social Impact Investing by Private Equity Funds Stands at $4 Billion in the United States:
- 58 percent of GPs making social impact investments were created after the year 2000, indicating growing interest in the practice.
- Newer funds are smaller and more numerous than their more established counterparts – except in the double bottom line category, where newer funds have more assets.
- Twice as many GPs classified as double bottom line were formed post-2000 than pre-2000, demonstrating the growing belief that financial return and intentional social outcomes can be achieved concurrently.
- 53 percent of financial first firms were created pre-2000, indicating a longer history of practice in this area, driven primarily by public pension fund economically targeted investment programs with the dual objectives of generating attractive financial returns and local economic development.
- An overwhelming majority (86 percent) of funds employ investment strategies focusing on early stage investments (44 percent) and growth equity investments (42 percent).
To download the full white paper please visit our reports and publications library.
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