What the 1 Percent (of Capital Markets) Could Do for Impact Investing

November 25, 2011 Editor 0

Authored by: Logan Yonavjak

How can we unlock new sources of capital from retail investment to ensure impact investment opportunities aren’t just for the wealthy?

While major investment banks have alluded to the promise of impact investing, (think J.P. Morgan in its 2010 report with The Rockefeller Foundation, which included an analysis of 1,100 impact investments that were identified as asset class), at this point in time, impact investing is still not an important activity for any of these major players. Even if it were deemed a priority, the vast majority of the $80 trillion in global capital markets is locked up in investment structures unlikely to be unlocked for impact investment anytime soon.

So what is a realistic goal in the near-term to free up some of this capital and how do we unlock it? Anthony Bugg-Levine and Jed Emerson in their new book Impact Investing: Transforming How We Make Money While Making a Difference discuss how opening just one percent of these assets for impact investing would create “a capital pool four times larger than all current annual official donor flows and almost three times greater than the total of U.S. annual charitable giving.”

 

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Categories: Next Billion

Tags: capital market, impact, invest, investment, percent