A Market Emerges: The Six Dynamics of Impact Investing

By Cathy Clark, Jed Emerson and Ben Thornley

Impact investing is taking shape as a distinct activity, with its own unique stakeholder relationships and operational strategies. As dozens of new funds are created explicitly to tackle the world’s most intractable social and environmental problems, including over 60 globally in 2011, the diverse practices of impact investing are coming into sharper focus. We have defined evolving tensions in the field of practice as Six Dynamics, each of which describes a unique set of relationships, challenges and questions. Further investigation of the Six Dynamics will underpin a deeper understanding of the best practices required to deliver blended financial and social returns successfully, particularly for funds and their managers. The Six Dynamics build off a simple ecosystem model of impact investing. Funds link the providers of capital (investors) to the recipients of capital (investees). Platform and financial innovation enable investors and funds to provide and deploy capital more efficiently.

Pacific Community Ventures, Inc. (PCV), Impact Assets, The Fuqua School of Business, 2012

Report_Clark_AMarketEmergesTheSixDynamicsOfImpactinInvesting _2012