Impact investing
: an analysis of industry challenges and readiness for implementation by traditional institutional investors

  • Bas Wilhelmus Thomas van Outersterp (Student)

Student thesis: Master's Thesis

Abstract

The purpose of this dissertation is to provide clarification on recent developments and challenges within the impact industry. Moreover, it provides insights on whether the industry has sufficiently developed to a viable investment strategy for traditional institutional investors. It is concluded that the impact investing industry has made significant steps in the right direction for some challenges. Firstly, definitions are currently more congruent. However, discrepancies in details exist and further clarification is necessary to avoid miscommunication and greenwashing. Furthermore, information on financing instruments, investor styles, strategic approaches and the balance/relation of return and impact have progressed. However, major challenges to industry growth and broad adaptation into portfolios of traditional institutional investors remain. These include; a lack of sophisticated industry infrastructure, deficiency of high-quality investable opportunities among the risk/return spectrum and lacking asset allocation efficiency. Furthermore, sufficient standards of financial returns and impact measurement need to be constructed. Although these challenges are far from being overcome, developments are going in the right direction. The impact investing industry is an increasingly viable investment strategy. However, given the current state of concrete challenges and evidence of suboptimal practices, it is an industry still in its growth stage. This research therefore concludes that it will most likely still take significant time (years) for these challenges to be overcome and consequently for traditional institutional investors to broadly implement impact investments in their portfolios.
Date of Award19 Jul 2016
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorSusana Frazão Pinheiro (Supervisor)

Designation

  • Mestrado em Gestão

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