More than half of all impact funds listed on Phenix Capital’s Impact Database contribute to building more resilient economies, despite a slight decrease in new fund launches since the start of the COVID-19 pandemic
Impact funds contributing to creating more resilient economies attracted €232bn in commitments from institutional investors since 2015, according to the latest report by impact investment consultant Phenix Capital Group.
Out of the total 2,050+ funds listed on the firm’s Impact Database, 1105 funds contribute to building resilient economies.
According to the report, fundraising figures for economy resilience-focused funds show private equity, real assets and private debt impact funds were preferred by institutional investors, raising on average €45bn per asset class since 2015.
The report also found that, since 2015, only €5bn was committed towards funds contributing to access to food (SDG 2) and peace-building economies (Goal 16). On the other hand, most the capital from institutional investors was allocated towards access to healthcare services (SDG 3), financial inclusion (SDG 1) and affordable housing (Goal 11).
In order to compute data on funds targeting investments aimed at creating a more resilient economy, Phenix Capital has developed new data sets of outcome-based investable themes mapped against the Sustainable Development Goals (SDGs).
Following the UN’s definition of resilience, Phenix Capital considered 15 different impact themes for this report, ranging from clean energy access scarcity, to access to healthcare or poverty reduction.
Since the start of the COVID-19 pandemic, the number of funds launched in this space has seen a slight decrease, which the report describes as surprising “considering the increased need for resilient economies” as a result of the pandemic, the war in Ukraine, inflation and the impending economic crisis.
“Despite recent global events, the market and regional allocation of impact funds towards resilient economies since 2015 remained fairly stable with an unsurprising focus on emerging markets. Only the Middle East and Africa region experienced an increased exposure at the expense of LatAm-focused funds. Current fundraising figures remain in line with this observation,” the report says.
According to the research, the low flow of capital towards key resilient themes highlights the need for impact-first investments, such as catalytic capital, blended finance, and philanthropic investments.