Who are Impact Investors?

41 Pages Posted: 24 Jun 2020

See all articles by Theodor Cojoianu

Theodor Cojoianu

Queen's University Belfast; University College Dublin (UCD) - Michael Smurfit Graduate School of Business; University of Oxford - Smith School of Enterprise and the Environment

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin; European Commission's Platform on Sustainable Finance

Yanan Lin

University College Dublin

Date Written: May 31, 2020

Abstract

Impact investing aims to simultaneously deliver two objectives:

(i) social and environmental benefits and

(ii) financial returns for a desired investment risk level.

This dual objective function differentiates impact investing from other forms of investing that integrate environmental, social or governance (ESG) aspects which consider financial returns as primary objective with ESG outcomes being secondary ambitions. Despite being one the fastest growing asset classes, academic studies of impact investing remain rare, and an extensive analysis of impact investor characteristics is yet to be undertaken. Using a large data set of over eight thousand private markets investment (PMI) firms around the world, we are able to differentiate between impact investors, ESG and conventional PMI firms. We unveil differences in their ownership structure, their asset class preferences, their sectoral focus and the types of partnerships they pursue to deliver impact in addition to financial returns. We find that impact investing firms to be younger than ESG investment firms and more likely to be owned by governments. They invest over-proportionally in agriculture, clean-tech and education sectors and under-proportionally in “sin” industries such as gambling or tobacco. Finally, in comparison to ESG investors, impact investors are more likely to forge partnerships towards delivering their investment model, particularly with academic institutions.

Keywords: impact investment, private equity, sustainable finance, partnerships

JEL Classification: G24, L26, L31, O35, Q01, Q56

Suggested Citation

Cojoianu, Theodor and Hoepner, Andreas G. F. and Lin, Yanan, Who are Impact Investors? (May 31, 2020). Available at SSRN: https://ssrn.com/abstract=3615094 or http://dx.doi.org/10.2139/ssrn.3615094

Theodor Cojoianu

Queen's University Belfast ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

University College Dublin (UCD) - Michael Smurfit Graduate School of Business ( email )

Blackrock, Co. Dublin
Ireland

University of Oxford - Smith School of Enterprise and the Environment ( email )

United Kingdom

Andreas G. F. Hoepner (Contact Author)

Smurfit Graduate Business School, University College Dublin ( email )

Blackrock, Co. Dublin
Ireland

European Commission's Platform on Sustainable Finance ( email )

2 Rue de Spa
Brussels, 1000
Belgium

Yanan Lin

University College Dublin ( email )

UCD Michael Smurfit Graduate Business School
Carysfort Ave.,Blackrock
Dublin, Dublin 4
Ireland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
236
Abstract Views
993
rank
155,815
PlumX Metrics