Private debt impact investments are becoming increasingly popular for investors looking to generate financial returns while creating positive social and environmental impact. This type of investing typically involves investing in a private debt fund, or directly into companies that aim to create measurable social or environmental benefits. In this article, we will provide an overview of private debt impact investments, including the types of options available, and examples of investment offerings on Impact Capital Partners.
Before getting into private debt impact investments, let’s start with a brief introduction on impact investing.
Impact Investments are investments made in social enterprises or investment funds that seek to generate positive social and/or environmental impact alongside a financial return. As opposed to SRI and ESG investing, which rely on exclusionary practices to screen out harmful investments, impact investing aims to bridge the altruistic principles of philanthropy with traditional investing. You can learn more about the differences between these types of investing in our article SRI vs. ESG vs. Impact Investing.
Depending on the strategic goals of the investor, impact investments can be made in frontier, emerging or developed markets, and can target a range of financial returns from commercial (“market”) returns to concessional (“below-market”) returns. Impact investments can also be made through various asset classes, and can focus on varying impact themes.
According to the Global Impact Investing Network’s October 2022 report, the impact investing market currently exceeds $1.16 trillion in assets under management. In April 2019, GIIN estimated the market size at $502 billion and by 2020 that estimate had grown to $715 billion.
Private Debt impact investments are investments made through private debt vehicles that seek to generate positive social and/or environmental impact alongside a financial return. One common type of private debt vehicle includes impact-focused private debt funds, which provide financing to companies or projects that have a clear social or environmental objective. These funds typically issue loans or other types of debt instruments, and offer investors a fixed return on their investment.
Another type of private debt impact investing includes direct lending, where investors provide financing directly to a company or project in need of capital. This type of investment often involves longer-term commitments and can provide investors with higher returns, but also comes with higher risk.
Private debt has been used to finance a wide range of socially and environmentally impactful projects and companies. Below you will find some examples of private debt impact investments listed on Impact Capital Partners.
Private debt impact investments are making a significant impact on the social and environmental challenges that we face today. By investing in companies and projects that aim to create measurable social or environmental benefits, investors can make a tangible difference in the world while also generating financial returns. Whether investing in social impact-focused private debt funds or providing direct lending to environmentally impactful projects, private debt impact investments can provide attractive financial returns while also making a meaningful difference in the world. As the impact investing industry continues to grow, private debt impact investments will play an increasingly important role in addressing the most pressing social and environmental challenges of our time.
At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact investing strategies.
1 Prospective investments that are sourced through a Foreign entity or Broker-Dealer (“FBD”) are offered to U.S. Institutional Investors through an engagement with Pinnacle Capital Securities, LLC (“Pinnacle”), member FINRA / SIPC, who is authorized to chaperone the FBDs under SEC Rule 15a-6.
2 All listed investment opportunities are intended for INSTITUTIONAL INVESTORS ONLY.
3 All listed investment opportunities may or may not be profitable. They are speculative investments and, as such, involve a high degree of risk. Nothing contained above shall constitute a recommendation or endorsement to buy or sell any security or other financial instrument.
4 For Funded Opportunities, there is no guarantee that future investments will be similar.
5 Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion.
6 Impact Capital Partners is dependent upon its Fund Mangers and FBDs to select investments and conduct operations.
7 Total facility amounts represent the proposed amounts that would be available to the borrower under an agreement. This amount may change over time.
8 Interest rates include contractual rates and accrued fees where applicable and are gross of fund fees and expenses. This metric is not a measure of investment performance nor is it necessarily indicative of distributions that the Fund Manager may provide to investors.
9 All industry updates are provided to Impact Capital Partner by their Fund Managers and FBDs.