2024
Gaggiotti, G., Gianoncelli, A., Venturato, A., and others
The report titled "The Size of Impact," published in 2024 by Gaggiotti, Gianoncelli, and Venturato, provides a comprehensive analysis of the European impact investing market. It marks the second harmonized exercise to size this market, reflecting significant growth and evolution in the landscape of impact investing across Europe. The private impact investing market has skyrocketed to €190 billion, accounting for 2.5% of the €7.6 trillion in eligible assets under management, while the public segment stands at €40 billion. This surge highlights a 20% increase in direct investments in unlisted assets from 2022 to 2023. The report identifies a robust market structure characterized by an annual growth rate of 21%, aligning with global trends. Key players such as the UK, Netherlands, and France lead the way, supported by strong regulatory frameworks and well-established ecosystems. Private equity remains dominant, with VC/PE fund managers holding 39.1% of direct assets in unlisted investments. Institutional investors, particularly pension funds and insurance companies, contribute significantly, providing 28% of total funding. Noteworthy developments include a marked increase in investor additionality, now at 62%, and a global capital reach of 45% outside Europe, particularly targeting Africa and Asia. Despite these promising indicators, the report underscores that only 17% of investments are currently aligned with the Sustainable Development Goals (SDGs), indicating a critical need for scaling efforts to effectively contribute to these global objectives.
This comprehensive report on the European impact investing market, published in 2024 by authors Gaggiotti, G., Gianoncelli, A., and Venturato, A., represents the second harmonized European impact investing market sizing exercise.
Executive Summary
The study reveals significant growth and evolution in Europe's impact investing landscape. The private impact investing market has reached €190 billion, representing 2.5% of eligible assets under management (€7.6 trillion), while the public impact investing market stands at €40 billion. This demonstrates substantial growth from the previous assessment, with direct investments in unlisted assets increasing by 20% between 2022 and 2023.
Key Findings:
- Market Structure and Growth: The market shows robust expansion, maintaining momentum with growth rates comparable to global trends (21% annual growth rate reported by GIIN)
- Geographic Leadership: The UK, Netherlands, and France emerge as market leaders, supported by well-established ecosystems and strong regulatory frameworks
- Investment Approaches: Private equity dominates the asset class landscape, with VC/PE fund managers controlling 39.1% of direct assets under management in unlisted assets
- Funding Sources: Institutional investors, particularly pension funds and insurance companies, lead capital contribution with 28% of total funding, followed by banking institutions at 22%
- Impact Focus: The study shows increased attention to SDGs, with Decent Work and Economic Growth (62%), Reduced Inequality (55%), and Climate Action (46%) as primary targets
Notable Developments:
- Investor Additionality: A significant increase to 62% of capital in unlisted assets showing investor additionality, up from 48% in the previous report
- Global Reach: 45% of capital flows outside Europe, with increased focus on Africa (18%), followed by Asia (12%) and Latin America (8%)
- Impact Measurement: 88% of organizations report clear evidence of managing impact, an improvement from 83% in 2022
The report emphasizes that while the impact investing market shows promising growth, significant scaling is still needed to meaningfully contribute to achieving the SDGs, with only 17% currently on track. The study, incorporating data from 431 organizations across 21 European countries, represents a substantial increase in scope from the previous study's 285 organizations, reflecting growing market maturity and improved collaboration in data collection.