Impact investments achieved a key milestone in 2022: Since that year, they have accounted for a majority of family office investment deals, according to PwC’s Global Family Office Deals Study 2024. The report calls this a “significant tipping point” and says next-generation family members are a significant driver of the trend.
The PwC report offers other insights into impact investing trends, as well. For example, survey respondents identified education and renewable energy as the most common targets of these investments. The report also notes that for almost all of the past decade, at least two-thirds of family offices’ impact investments have been made jointly with others, in so-called club deals, rather than solo investments.
The report also gives a regional view of the investments: The U.S. accounts for more than half of family offices’ impact investments, though its share dropped in the first half of 2024, while Europe’s share rose.
For those interested in a deeper dive into impact investing, the Global Impact Investing Network, or GIIN, offers a number of resources for interested investors, including family offices. The GIIN guide to impact investing defines what impact investments are, explains who makes them and why, and estimates the size of the current impact investing market at over $1.5 trillion.
The GIIN also offers a report that delves into impact investors’ expectations for financial returns: Almost three-quarters (74%) of those who answered a GIIN survey were seeing risk-adjusted, market-rate returns. The rest of the respondents were seeking below-market-rate returns, with 15% seeking returns that were closer to market rate and 12% seeking returns that were closer to capital preservation.
How did the impact investments do? Quite well: 86% of respondents said their impact investments met or outperformed their financial expectations. And 90% said the investments met or outperformed their impact expectations.
GIIN data also looks at progress in the impact investing industry in recent years. Survey respondents were most likely to cite significant progress in finding professionals with relevant skillsets and research on market activity and trends. When asked about challenges facing the field, the difficulty of comparing impact results to peers topped the list, followed by the fragmentation across impact measurement frameworks.
