Impact Investors Are Changing: Analysis from the GIIN Surveys

By Waka Itagaki

This article is the second in a series from this author on the topic of impact investing. For Waka Itagaki’s earlier post on reducing transaction costs in development impact bonds, please click here.


Introduction and Background

The role that impact investors are playing in international development is increasingly growing. The amount of assets under management (AUM), the total market value of investments managed by financial institutions, in emerging countries was $36.4 billion in 2015. This is larger than the net Official Development Assistance (ODA) provided by the United States. International development actors should pay attention to this shift and become acquainted with the work of impact investors. One way to do this is through reading the annual impact investor surveys conducted by the Global Impact Investing Network (GIIN).

GIIN is a nonprofit organization that supports activities, education, and research that accelerate the development of a coherent impact investing industry. GIIN has conducted annual impact investor surveys since 2009 by leveraging its network of impact investors, and the surveys provide information on the current situation of impact investors. However, these surveys fail to acknowledge how impact investors are changing over time. Moreover, there is not much literature by other stakeholders that analyzes the data and discusses trends in impact investing in a consumable way. This article fills this gap by analyzing six GIIN surveys from 2009 to 2015 to illustrate how impact investors are changing.

GIIN Survey Methodology

The methodology of the surveys has differed over time. The first survey in 2009 was sent out to all members of the GIIN Investors’ Council and a few additional participants. The survey in 2015 set more clear criteria – respondents should either (1) have committed at least $10 million in impact investments since their inception and/or (2) have closed at least five impact investing transactions. What all the surveys have in common is that GIIN collects data from impact investing organizations, not individual investors. The organizations in the samples include fund managers, foundations, diversified financial institutions, family offices, development finance institutions, and pension funds/insurance companies. Throughout the surveys, fund managers are the largest population of the sample. While the surveys in 2009 and 2010 do not disclose the location samples of those included in the survey, later surveys show that the organizations’ headquarters are located across the world. However, approximately 80 percent of respondents are located in either North America or Western, Northern, and Southern Europe.

There are three shortcomings of this article’s analysis: First, each survey has a different sample, which means that the different results might be attributed to the difference in samples and not necessarily to the transformation of impact investors. Second, each survey asks slightly different questions to investors, and some data is not available in some years. For the purposes of this analysis we will ignore the missing data. Finally, the surveys do not capture all impact investing activities – as mentioned, GIIN does not collect data from individual investors, and the respondents of the surveys are not necessarily all of the organizations that have participated in impact investing.

Trends in Impact Investors Since 2009

This analysis highlights four transformations in impact investors since 2009:

  1. The number of impact investors is growing

The first transformation is the growing number of impact investors. While the number of samples in 2009 was only 24, in 2015 it was 158. Although the GIIN surveys do not capture all global impact investors as mentioned above, the growth of sample size implies that the total number of impact investors has grown steadily over time


This graph, and all graphs in this article, are original creations of the author Waka Itagaki based on GIIN survey results.

  1. Impact investors are becoming emerging-market-oriented

In the past several years, impact investors have increased the share of AUM in emerging countries. The graph below shows AUM by region and demonstrates that more investors have become interested in emerging economies such as Sub-Saharan Africa, and East, South and Southeast Asia. In 2009, the share of AUM in Sub-Saharan Africa and East, South and Southeast Asia were six percent and five percent, respectively. However, in 2015, these percentages became 15 percent and 13 percent, respectively. This trend is likely to continue; the survey published in 2016 illustrates that 40, 30, and 25 respondents are planning to increase allocations in Sub-Saharan Africa, East and Southeast Asia, and South Asia during 2016, respectively.


Increasing interest in emerging economies can be explained by their development needs as well as their economic growth prospects. Emerging economies often have the need for impact investment to address social problems. In particular, Sub-Saharan Africa and South Asia are the two regions where 42.7 percent and 18.8 percent of the respective populations live on less than $1.90 a day. By investing in such regions, impact investors have the opportunity to catalyze social impact. And as impact investors seek not only social impact but also financial returns, the economic growth prospects of emerging markets are attractive, especially as compared to the slowing economic growth and financial crises in advanced countries. The World Bank forecasts four to five percent economic growth in the next couple of years in Sub-Saharan Africa. In contrast, the United States, Euro Area, and the United Kingdom are estimated to grow by two to three percent, one to two percent, and two to three percent, respectively.

  1. The number of fund managers is increasing

Analyzing the samples based on organization type, fund managers turn out to be the largest population of survey respondents and increasing in share. This increase can be explained by fund managers’ increasingly important role in connecting capital with investment opportunities. GIIN explains why intermediaries such as fund managers are attractive to investors: they offer geographic and sectoral expertise that investors may lack in the nascent and frontier markets. Furthermore, investment via intermediaries gives investors the opportunity to invest in larger amounts that satisfies their mandates. These increasing roles of fund managers drive demand from investors, and thus make the intermediary market grow.


  1. Impact investors are reducing the percentage of capital committed to microfinance

In terms of AUM by sector, impact investors have reduced the share of investments in microfinance over the years as illustrated below.


Microfinance Market Outlook 2016, a report published by responsAbility, also shows that microfinance market growth rates have been slowing since 2013. These rates in 2012, 2013, 2014, and 2015 were 22.7, 18, 13.4, and 12 percent respectively.  The report forecasts that the microfinance market growth rate will most likely keep declining in 2016. While these growth rates do not necessarily correlate with the change of share of microfinance in terms of AUM, these graphs imply the overall relative decline of interest in microfinance. The Microfinance Market Outlook 2016 explains why the growth deceleration is happening. One of the reasons they identified is the shift of demands, which has shifted to new, more advanced sectors, such as SME financing or leasing, which remain thoroughly underinvested.

The relatively shrinking interest in microfinance may also be attributed to recent research, which shows the marginal impact of microfinance on poverty reduction. A paper on the first Randomized Controlled Trial (RCT) of microcredit was published in 2009, and subsequently several RCT papers became accessible to the public after 2012. One of the papers that analyzed those six microcredit RCTs revealed that none of the six studies found a statistically significant increase in total household income due to use of microcredit. The lack of evidence of microfinance’s transformative effects on poverty reduction have possibly discouraged impact investors who want to see their funds have a social impact.


This analysis implies that impact investors have changed over the past few years. However, there are a couple of limitations in this research – issues with consistent samples, data availability, and rigor. In order to conduct a more comprehensive and robust analysis, raw data is required. The GIIN, which has raw data of the surveys, should conduct further research on the transformation of impact investors over time.

While this analysis has the aforementioned limitations, there are many implications for individuals and entities in the impact investing field. Investees and service providers should consider how to attract impact investors based on these trends. Aid donors also have to rethink their changing roles as impact investing grows in populatrity. The transformation of impact investing will lead to the progress of international development.


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