UK impact investing worth £58 billion in 2020

A new report by the Impact Investing Institute has found that the UK impact investment market was worth £58 billion in 2020.

The report, “Estimating and Describing the UK Impact Investing Market”, published in partnership with EY, finds that the UK impact investment market was worth an estimated £58 billion in 2020, representing about 3.3-8% of the total global market.

Social investors, private equity and venture capital firms and foundations were identified as the leading investors although impact investing accounts for less than 1% of total AUM in the UK.

The report includes surveys of more than 40 market participants and key findings include:

  • 97% of survey respondents held the view that over the past two years asset allocation to impact had increased.
  • 64% predicted 10% annual growth in funds flowing to impact investments with 36% forecasting above 20% a year.
  • Healthcare, affordable and clean energy, and sustainable cities and communities are the top focus areas for investment.
  • Approximately 90% of the survey respondents reported that 2020 returns were either in line with or exceeded their targets.
  • 75% of survey respondents are planning to increase their allocation to impact by more than 10% in the next five years.

The institute says that applying a weighted average of all respondents to current estimated impact AUM results in a potential 15% growth, which would double funds allocated to impact to £100bn in five years.