Impact Investing at IFC

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For six decades, IFC has been at the forefront of impact investing in emerging markets. Over the years, others joined us in the search for impact and returns. With the establishment of the Operating Principles for Impact Management, we hope to work with a much broader universe of private investors and development finance institutions to mobilize the trillions of dollars in financing necessary to achieve the Sustainable Development Goals (SDGs).

What is Impact Investing?

Impact investing has emerged as a significant opportunity to mobilize capital into investments that target measurable positive social, economic, or environmental impact alongside financial returns. A growing number of investors are incorporating impact investments into portfolios. Many are adopting the SDGs and other goals as a reference point to illustrate the relationship between their investments and impact.

The question for many investors is how to increase their impact. Despite increased interest and a growing number of product launches claiming to be impact investments, there has been no common discipline for how investors should manage investments for impact and the systems they need to support it. This has created complexity and confusion for investors, including about the differences between impact investing and other forms of responsible investing.

What are the Impact Principles?

To address this challenge, IFC—in consultation with a core group of external stakeholders—developed and launched the Operating Principles for Impact Management in the spring of 2019. These Principles support the development of the impact investing industry by establishing a common discipline around the management of investments for impact.

 

 

Opportunities for Investors

  • AMC funds:
    IFC’s Asset Management Company (AMC) offers investments in IFC equities and debt, and has raised $10 billion across 13 funds since 2009.
  • Equity co-investments, especially in technology investments
  • Syndications
  • MCPP:
    AMC’s Managed Co-Lending Portfolio Program (MCPP) allows institutional investors the opportunity to passively participate in IFC’s future loan portfolio. Through the platform, we leverage IFC’s origination capacity and deep market knowledge to source opportunities for third-party investors to co-lend alongside IFC on commercial terms. Piloting and implementing such co-investment platforms provide a key contribution from development finance institutions such as IFC with a focus on the private sector.
  • IFC bonds:
    Green bonds and Social bonds