Impact investing that may once have been an abstract concept to U.S. public pension funds and other institutional investors is becoming more real during the unprecedented market and social disruptions caused by the COVID-19 crisis, advocates say.
"Arguably this is a time that everyone who has either been in impact investing or looking to get into impact investing is very attuned to. I think there is a very clear acknowledgment that the time to invest is now," said Rekha Unnithan, managing director and co-head of private markets impact investing at Nuveen, with $5.5 billion in public and private impact investments under management.
Amit Bouri, CEO and co-founder of the Global Impact Investing Network in New York, agreed. "Many investors will be sticking to their knitting, but as the dust is settling, we are already seeing a number of investors looking at how they can allocate capital, and where they should be," he said. The GIIN estimates that the global impact investing market was $502 billion as of 2019, with sizable growth from new entrants. Nearly three-fifths of all respondents to the GIIN's 2019 survey entered the market over the last 10 years, and nearly a quarter made their first impact investment within the last five years.
This latest increased interest in impact investing due to the coronavirus pandemic may not fit neatly into that bucket, given the unprecedented speed and breadth of the pandemic's reach and the needs cre- ated by it, but it does fall under the broader category of sustainable, responsible and impact investing, which in 2018 represented 1 in 4 dollars under professional management in the United States, according to the US SIF Foundation.
Illinois Treasurer Michael W. Frerichs prefers to call it sustainable investing because "pension funds are long-term investors. The pandemic has strengthened our resolve here," said Mr. Frerichs, the state's chief investment officer and a trustee on the Illinois State Board of Investment overseeing $19.3 billion in defined benefit retirement assets. He sees the crisis leading to a "slow sea change" in companies' attitudes about their responsibility to all stakeholders, including local communities.