Private equity bullish on impact investing for 2017

Private equity investors plan on dramatically increasing their impact investing deal value this year, according to the annual Global Impact Investing Network survey.

Private equity investors plan to almost double the capital allocated to impact investing this year, according to an annual survey by the Global Impact Investing Network released on Wednesday.

Private equity fund managers, who accounted for 27 percent of the total $113.7 billion of impact assets represented in the survey, plan to up their impact investments by 89 percent for the year from $1.9 billion to $3.7 billion. They also plan to increase the number of impact deals by 14 percent from 822 to 937 transactions this year.

Private equity was also the most popular method for impact investing, with 76 percent of respondents indicating they had impact capital allocations to the asset class. The survey participants, who could pick multiple strategies, picked private debt as the second-most popular way of impact investing, at 54 percent.

For the 2017 year, private equity fund managers plan to raise a projected $5.3 billion, more than three times the amount they raised in 2016, according to the survey. Although they raised slightly less than the amount private debt managers did last year, their projections for 2017 are more than the $3.7 billion planned by their debt counterparts.

By region, South Asia has been the most active for private equity exits in impact between 2010 and 2016, with 42 total. US and Canada were the next busiest region, with 34 private equity exits, according to the survey.

Some 91 percent of investors said the financial returns on their impact investments were in line with or outperforming expectations, the survey showed.

GIIN surveyed 209 impact investing organisations, including fund managers, banks, foundations, development finance institutions, pension funds, insurers and family offices.