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New Wharton Research Shows “Doing Well While Doing Good” Is Viable Investment Strategy, Investors Seeking Social Impact Can Receive Comparable Returns

Posted By Administration, Friday, October 9, 2015

Great Expectations: Mission Preservation and Financial Performance

The Wharton School of the University of Pennsylvania recently released a new report, “Great Expectations: Mission Preservation and Financial Performance in Impact Investments.”

From their press release:

The new study provides an objective, rigorous look at two of the most important aspects of impact investing: financial returns and long-term impact. Specifically, the study explores the widespread assumption that impact investing private equity funds cannot achieve market-rate financial performance. The report’s findings suggest that – in certain market segments – investors might not need to expect lower returns as a tradeoff for social impact. Impact investing is an investment approach that intentionally seeks to generate measurable social or environmental impact alongside a positive financial return.  According to the study’s authors, certain market segments of funds in the sample yield returns close to those of public market indices.

The new study evaluated the financial performance of 53 impact investing private equity funds—representing 557 individual investments—relative to public market indices such as the Russell 2000 and other benchmark indexes. The study also sought to determine what one might expect to happen to a portfolio company’s social or environmental mission when its impact investors seek liquidity.

In doing so, the study acts as a key reference point for investors seeking to compare impact investing to other asset classes and investment options.

This report also generated a lot of buzz at ANDE's 2015 Annual Conference session on Exits in Impact Investing. Make sure to view the report on Issuu or download a PDF version here.  

Tags:  impact investing 

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