The Private Asset Impact Fund Report 2021 has just been released by Tameo Impact Fund Solutions, a spin-off from Symbiotics (download the full report below).
Supported by SECO, Symbiotics and TCX Fund, as well as 18 major market players, the report offers data on nearly 300 indicators for 175 impact funds focusing on developing countries. It analyzes a subset of the impact investing universe, focusing on fund investment strategies that target emerging and frontier markets, with a development finance impact bias.
This ecosystem comprises over 250 specialized investment boutiques and the 500 private asset funds that they manage or advise, with an estimated size of USD 38 billion. The survey captures close to two thirds of the market in assets under management (AUM), with USD 24 billion covered in the study sample.
The results notably show a flat market growth of +1.5% for the sector in 2020. Growth forecasts are, however, much higher for 2021 (+12.3%) and this is the case across all impact sectors and asset strategies. Net returns have decreased across the board but remained positive in most cases, whereas two-thirds of funds expect an increase in their performance in 2021.
Other takeaways show that fund cash levels have witnessed 21% growth year-on-year, whereas the COVID-19 pandemic brought record levels of loan provisioning and write-offs in 2020. A new report section, developed jointly with TCX, reveals that funds invest in more than 60 developing market currencies, but most use foreign exchange hedging to mitigate risk.
“We view this report as a public good. It provides more transparency in the market, thus spurring competition and innovative approaches of impact strategies. It is time to step up private impact capital towards emerging and frontier countries”, observes Christian Brändli, Deputy Head of the Private Sector Development at the Swiss Secretariat for Economic Affairs (SECO), co-lead sponsor of the study.