Investor’s five-year plans for impact allocations

The majority of impact investors plan to increase their allocations to impact strategies in emerging markets, according to research published by the Global Impact Investing Network this week.

The new report is the final instalment of GIIN’s GIINsight series, for which it has gathered data from 308 impact investors. The previous reports examined the characteristics of impact investors, how investors are allocating impact capital and impact management and measurement.

While asset allocations have been growing the fastest in North America and Western Europe over the last five years, Sub-Saharan Africa (56 percent) and Latin America (48 percent) were found to be the most popular areas to increase allocations over the next five years. North America (32 percent) and Western Europe (38 percent) were less popular.

When it comes to sectors, energy (69 percent) is the area where most investors are looking to increase their allocations, followed by food and agriculture (60 percent), and infrastructure (59 percent).

A greater percentage (66 percent) of emerging market-focused investors are looking to increase allocations to food and agriculture compared to developed market-focused investors (53 percent). Developed markets-focussed investors are more likely to increase their allocation to energy (74 percent) than peers focused on emerging markets (63 percent).

There were also differences between direct and indirect investors. 73 percent of direct investors plan to increase their allocation to energy, while only 50 percent of indirect investors intended to do the same. Similarly, a far higher proportion of direct investors (61 percent) plan to increase their allocations to forestry and timber over the next five years compared to indirect investors (33 percent).