The Size of Impact

The report The Size of Impact is published by Impact Europe and authored by G. Gaggiotti, A. Gianoncelli, and A. Venturato. It presents the second harmonised European impact investing market-sizing exercise, coordinated through the European Impact Investing Consortium, with data drawn from organisations across European countries.

The report estimates the European private impact investing market (direct and indirect investments in unlisted assets) at €190 billion, representing 2.5% of €7.6 trillion in assets under management considered eligible for impact investing in Europe. It also estimates a separate public (listed) impact investing market of €40 billion, reflecting different processes and levers between private/unlisted and public/listed markets.

The study reports that unlisted impact investing has grown from €80 billion to €190 billion over the past two years. For direct unlisted assets under management reported by organisations in the sample, direct AUM is shown at €94 billion at end-2022 and €113 billion at end-2023 (a 20% increase). The report links part of the improved market picture to stronger collaboration and expanded coverage, noting the study includes 431 organisations from 21 European countries (up from 285 organisations in the previous exercise).

A key theme is “investor additionality”, described as impact that would not happen without the investment. The report states that 62% of capital invested directly in unlisted assets shows some element of investor additionality, up from 48% in the prior report. It distinguishes financial additionality (e.g., taking higher risk, accepting lower returns, providing patient/flexible capital) and non-financial additionality (e.g., active engagement with investees to improve impact performance). 🇪🇺 Country patterns in Europe The report describes the impact investing market as led by the United Kingdom, the Netherlands, and France in terms of assets under management, supported by established ecosystems and institutional engagement. It also highlights contributions from Italy, Denmark, Belgium, and Spain, and characterises Türkiye, Portugal, and Greece as emerging markets with growth potential.

In unlisted markets, private equity is presented as the leading asset class for impact investors, with private debt also substantial. The report also references real assets (including social housing projects) and social outcomes contracts as smaller but potentially high-impact asset classes. This mix of equity, debt, and real-asset approaches is positioned as relevant for financing long-term solutions to social and environmental challenges, including affordable housing.

Institutional investors (including pension funds and insurance companies) are reported as providing 27–28% of the capital made available to impact investors, with banking institutions at 22% and retail investors at 14%. The report states that 45% of European impact capital flows outside Europe (a 7-percentage-point increase vs 2022), with Africa receiving 18%, Asia 12%, and Latin America 8% of the outside-Europe allocation. On impact practices, it reports that all organisations in the study measure impact and that 88% show evidence of managing impact (up from 83% in 2022).