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Despite the wide range of impact investment intermediaries that are available and the advantages they can offer, many funders remain unaware of this growing trend to deliver both social impact and financial returns. This study from 2007 provides an overview of these current trends and a listing of available intermediaries and explores key considerations and opportunities for funders.
Top Takeaways
- Intermediaries are gaining in popularity, delivering market-rate returns, and have been used for more than $500M of mission/impact investments through 2005.
- The use of intermediaries offers a number of advantages, including ease of investment, reduced risk, lower transaction costs, specialized expertise, consolidated performance reporting, and a broad pipeline of investments.
- Six types of intermediaries can be used: community development banks and credit unions, loan funds, venture capital and private equity funds, fixed income funds, real estate funds, and public equity mutual funds.
Their skills, relationships, technical assistance, and ability to assemble complex financing packages enable intermediaries to add value that funders can rarely achieve through direct mission investing.
