Impact fund managers’ pay increasingly linked to social and environmental performance, finds ImpactAssets 50 list

Impact fund managers’ pay increasingly rewards not just financial return, but also social and environmental performance, says US firm ImpactAssets. 

The firms’ annual ImpactAssets 50 list, published today, shows 23% of the listed fund managers integrate impact results into their remuneration strategies, compared to 16% the previous year. This has been labelled “impact-linked compensation”.

We are witnessing a pivotal shift in finance…impact investing is catalysing a fundamental reorientation of capital that is attuned to the urgent social and environmental challenges we face globally

Jed Emerson (pictured), ImpactAssets 50 review committee chair and chief impact officer at wealth manager AlTi Tiedemann Global, said: “We are witnessing a pivotal shift in finance more broadly: impact investing is catalysing a fundamental reorientation of capital that is attuned to the urgent social and environmental challenges we face globally.

“The IA 50 2024 is a testament to the industry’s commitment to harnessing the power of capital for good and a preview of the more systemic integration of impact considerations we can expect in the future.”
 

• Discover the impact investment musical production, based on Jed Emerson’s book in: Impact: the musical
   

The ImpactAssets 50 list is a global database of impact investment fund managers updated annually. The 2024 list is the 13th edition. 

All of the 155 impact fund managers included in this year’s ImpactAssets 50 list are meeting or surpassing their finance return target, the latest listing reveals: 79% of listed managers are meeting their finance return target and 21% are surpassing them. The majority of listed managers target market rate (43%) and above market rate (31%) returns.

Reflecting the growth and maturation of impact investing

The 2024 list saw not only the highest ever number of applications (343, 15% higher than 2023) but also the most diverse applicant pool to date. Of the applicants, 60% had investment teams composed of over 50% women and/or what ImpactAssets has categorised “people of colour”.

Sandra Osborne Kartt, deputy chief investment officer at ImpactAssets, said: “The record number of applications this year reflects the growth and maturation of impact investing in the global financial landscape.”

To be considered for ImpactAssets 50 2024, fund managers needed to have at least $25m in assets under management, more than three years of experience as a firm with impact investing, documented social and/or environmental impact and be available for US investment.

This year’s list includes fund managers with a total of US$25m assets under management. Participants include Acumen Capital Partners, BlueOrchard Finance and Root Capital.

ImpactAssets says the database is not intended to be a comprehensive list of all impact investors and is not representative of the entire impact market, as it relies on a process of application and selection for fund managers to be included.

Image credit: Negative Space

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