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Asset Allocation

Impact Investing is ‘Thriving’: Survey

Investors are putting more money towards social and environmental causes, and reporting encouraging results.

Investors committed more than $15 billion to impact investments in 2015—and plan to allocate even more this year, according to the Global Impact Investing Network (GIIN).

In a survey of 158 impact investors managing $77 billion, GIIN found that 79% planned to maintain or increase their impact investments in 2016. In total, respondents said they planned to commit nearly $18 billion to the sector this year.

Nearly three quarters said their investments performed as expected in 2015, with 19% reporting outperformance versus expectations. Just 11% said their impact investments underperformed last year.

For the most part, investors said they expected returns equivalent to the market rate, after adjusting for risk. However, 25% said they targeted returns slightly below the market rate, and 16% expected performance in line with capital preservation.

The bulk of 2015 investments ($7.2 billion) came from asset managers, who said they invested primarily on behalf of family offices and foundations. These limited partners said they preferred to make impact investments through managers due to their expertise and access to opportunities, as well as for the diversification and risk benefits of investing in a fund rather than investing directly.

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Respondents preferred private investments as instruments for impact investing, with 70% investing in private equity and 56% in private debt. Larger impact investors, including pension funds and insurers, also favored real assets.

More than a third of investments were made in North America. Other top locations for impact investments included Sub-Saharan Africa, Latin America, and Western Europe.

“We are encouraged to see the development of a truly diverse and global impact investing market,” said Amit Bouri, GIIN CEO. “This survey highlights a thriving market being built across geographies, sectors, and asset classes.”

Nearly all investors (95%) targeted social impact goals, while 52% focused on environmental impacts. Top social goals included access to finance, employment generation, health improvement, education, and income growth. Environmental investments, meanwhile, focused primarily on renewable energy and energy efficiency.

As for the social and environmental impacts of the investments, 99% said they achieved above or in line with expectations.

impact investing performance Source: GIIN’s “Annual Impact Investor Survey 2016“

Related: E&Fs Warm to Impact Investing

Home > News > Newsmakers > USS Head of Credit to Exit
Newsmakers

USS Head of Credit to Exit

Leandros Kalisperas is leaving the UK pension to pursue a career in politics.

Leandros Kalisperas (art by John Cuneo)(Art by John Cuneo)The head of credit at the UK’s Universities Superannuation Scheme (USS) is to leave his role after a six-year tenure to enter politics.

Leandros Kalisperas sent peers a note announcing his departure last week, a copy of which CIO obtained. He has led the £49 billion ($71 billion) fund’s public credit investments since joining in 2010, after two years running his own advisory firm.

In a statement, USS thanked Kalisperas for his “substantial contributions” to the portfolio.

Richard Fisher, head of fixed income, is to take on responsibility for internal credit investments in an “integrated fixed income team,” which will also include the pension’s government bond allocation. Emily Porter-Lynch, head of strategy implementation, will oversee USS’ external credit managers.

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In his note, Kalisperas said his departure was “a very difficult decision” due in part to his “strong personal loyalty” to Roger Gray, chief executive of USS Investment Management.

Gray hired Kalisperas to oversee a 5% allocation to public credit strategies, the pair having met while Kalisperas was a self-employed consultant.

 “Having been a hard-nosed banker I didn’t know what to think,” Kalisperas said of meeting Gray in a 2012 interview. “He was extremely technical, thoughtful, and switched on.”

The career change was prompted, Kalisperas told colleagues, by observing “destructive” political and financial events in Cyprus and Greece—his mother is Greek-Cypriot—and his disappointment with recent political developments in the UK.

“I believe it will take spokesmen from the left with ‘conservative’ backgrounds at a political level to provide credibility and an articulate response force,” Kalisperas said. “Such people will need… to use the language, discipline, and pragmatism of the right, in the service of the political economic values of the left.”

Kalisperas will leave at the end of June, and plans to spend “most of the second half of the year” researching his thesis.

Since May 2015, the USS credit team has been bringing assets in-house in line with a broader aim across the pension to establish “cost-effective and aligned internal investment solutions across asset classes.”

USS has been nominated in two categories for the CIO Innovation Awards, to be presented on June 2 in London.

Related: Forty Under Forty—Leandros Kalisperas, 2012, 2013, 2014 & Who Needs Daily Dealing?

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