Press release: Private asset impact fund ecosystem worth over USD 30 billion – PAIF Report 2020
THURSDAY 29TH, OCTOBER 2020Symbiotics publishes its inaugural global impact fund survey, merging its historical microfinance investment vehicle survey, started with the Consultative Group to Assist the Poor (CGAP) in 2007, and its private debt impact fund survey, started with the Global Impact Investing Network (GIIN) in 2018.
The Private Asset Impact Fund (PAIF) survey filters out the impact investing universe by focusing solely on strategies investing through funds and vehicles, targeting emerging and frontier markets, and with a development finance impact bias. This ecosystem is composed of over 210 specialized investment boutiques and the 435 private asset funds that they manage. The survey captures over two thirds of the market in assets under management (AUM), with USD 22 billion of data aggregation. The results show a market growth of 10% for the sector in 2019. In 2020, despite the pandemic, investment managers forecast stability – with only a slight decrease of 1.5% in AUM.
“We are truly pleased with the very wide market response received by our efforts to provide the first comprehensive review of the private asset impact fund ecosystem. We want to thank SECO and Canopy, as well as the 17 impact funds and investment managers co-sponsoring this edition with us, and most notably the 157 funds that reported over 100 data points, making this publication possible,” says Symbiotics CEO Roland Dominicé.
Other results of the combined sample size show that these funds are primarily managed out of Switzerland (35%), the Netherlands (18%), Germany (14%) and the United States (12%). The funds are split between Fixed income (61%), Equity (22%) and Mixed (17%) asset classes. The sectors they focus mainly on include Microfinance (55%) and SME development (10%), with the remaining funds split between Climate & Energy (8%), Food & Agriculture (6%), Health & Education (3%), and Housing, Water & Communities (2%). Funds serving multiple sectors account for the remaining 17%. Regional breakdowns position Latin America as the first target market (28% of portfolios), followed by Europe & Central Asia (25%) and South Asia (17%). The majority of their funding comes from institutional investors (52%), followed by private and retail clients (27%), and public funders (21%). In terms of returns, 2019 proved to be a stable vintage, with 4.3%, 4.6% and 6.3% respectively for fixed income, mixed and equity strategies.
The survey also confirms that the vast majority of funds are using environmental, social and governance (ESG) screening and reporting protocols. In terms of impact intentionality, Sustainable Development Goals number 1 (no poverty), 5 (gender equality) and 8 (decent work and economic growth) were the most often reported measurements. In terms of outreach and inclusion, more than 90% of investments go to low- and middle-income economies, with an average country GNI per capita of USD 6,290. Local financial intermediaries, banks and financial institutions channel 86% of PAIFs’ ecosystem capital, with end-client median financing levels at USD 1,800 per annum in the microfinance space.
“We welcome this new report, which provides an important update on the universe of private impact investments targeting emerging and frontier markets. It offers a deep dive into the diversity and innovative approaches of impact strategies. We believe the standardization, transparency and comparability that it brings into the market is an essential tool in the building of this industry, helping to bring in further private sector investors,” observes Liliana de Sá Kirchknopf, Head of the Private Sector Development Section at the Swiss Secretariat for Economic Affairs (SECO), co-lead sponsor of the study.
Download the full report.
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Symbiotics is the leading market access platform for impact investing, dedicated to financing micro- small and medium enterprises and low- and middle-income households in emerging and frontier markets. Since 2005, Symbiotics has structured and originated some 4,000 deals for over 450 companies in almost 90 emerging and frontier markets representing more than USD 5.5 billion. These investments have been purchased by more than 25 fund mandates and more than 50 third party specialized fund managers, forming a growing ecosystem and marketplace for such transactions.