The Financial Performance of Impact Investing Through Private Debt

The Financial Performance of Impact Investing Through Private Debt

In general, private debt funds focused on social impact can offer impact investors stable returns, a report from the Global Impact Investing Network and Symbiotics finds. Based on an analysis of the aggregate performance since 2012 of fifty private debt impact funds (PDIFs) and more than a hundred community development loan funds (CDLFs), the report, The Financial Performance of Impact Investing Through Private Debt (80 pages, PDF), saw evidence of stable returns across various private debt risk-return strategies, sectors, impact themes, and geographies. According to the study, PDIFs ranged in size from $3 million to more than $1 billion, with funds targeting market rate returns generating a compound annualized net return of 2.6 percent  over the five-year period and those targeting below-market returns generating -6.8 percent. The report also found that CDLFs had a median $25 million in assets under management; were most often focused on job creation, affordable housing, and food security; and generally targeted below-market-rate returns through notes, with interest rates averaging 2.9 percent.