Private Equity

Impact Investing

Impact Investing is intended to attain positive impact beyond financial return by seeking to proactively create positive social or environmental benefit. As such, Impact Investing needs to be distinguished from the field of socially responsible investments (“SR”) which is based on a negative-screening approach.

The Impact Investing market has gained strong momentum over the last years. The Global Impact Investing Network (GIIN) estimates impact investments to be worth USD 50bn, with a projection growth of USD 500bn by 2014.

Luxembourg has been aware of the importance of Impact Investing as an asset class for many years. Initially, it was the specific area of microfinance that developed the strongest. Today, 46% of the  worldwide assets under management by microfinance investment vehicles are registered in Luxembourg. The European Impact Investing Luxembourg (EIIL) initiative – to which Ernst & Young has been founding member in 2010 – aims at promoting the development of Impact Investing. In this context, EIIL has drafted a proposal around an “impact company” (société d’impact) which allows “impact first” and “financial first” investors to invest together in the same vehicle.