The power of Impact Investing #2: Investing in private markets

Some future forecasts show a rise in demand regarding private markets investments. This also applies to impact investing. Investing in private markets through impact investing can combine the financial benefits with environment or societal outcome and make a difference. In particular, the role of private capital, and private impact credit in particular and partnerships with development finance institutions are important levers:

? During due diligence, investors gain access to a wealth of detailed information that can also be helpful in the further strategic support of the company. Investing in private markets can therefore often create tangible value as it can focus on investing in real economies, identifying and incubating key future themes and playing a collaborative role in engaging with corporates to achieve their goals.

? Investing in private markets through impact investing combines financial benefits with measurable environmental or social outcomes, contributing to a more sustainable world. Interest in impact credit or debt, especially in direct lending, is growing as a means to finance important initiatives.

? Private impact loans help borrowers especially in emerging and developed countries, especially when they lack other funding sources. Development capital is often insufficient to meet development needs and public capital markets do not invest in the countries or sectors (e.g. infrastructure, agriculture) with the greatest funding needs. Development finance institutions and donors therefore work together to attract more private capital for the Sustainable Development Goals.

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