In December, with significant publicity, JP Morgan and GIIN announced that impact investing now qualifies as an â€śemerging asset class,â€ť with more than $3 billion dollars under management. The Center for Global Development published a report on impact investing in December, too, and the South African Chamber of Commerce in America just released a list of over 200 of what they call â€śmissing middleâ€ť funds investing in emerging markets.
Interestingly, of the six firms listed as having launched funds in 2010, only two have offices in the West, compared to eight out of ten in 2009. Until 2011, US and northern European firms have led the field, comprising (according to a survey by your humble correspondents) over 75% of the impact investing firmsÂ worldwide.
In 2011, expect that to change. In Latin America, some of the participating funds in Februaryâ€™s Inversion de Impacto forum are so fresh that they are still designing logos. In Africa, indigenous funds have yet to develop, but indigenous incubators such as Kenyaâ€™s iHub and South Africaâ€™s Heart Global are hopefully creating the infrastructure for local investors will follow. In India, indigenous funds are exploding: Aavishkaar is raising a second fund; and Varun Sahni, previously with Acumen, is raising a health-focused fund. Â To complement these funds, indigenous incubators such as Dasra and, more recently, Villgro areÂ building a strong pipeline and infrastructure. Â Local investors are in many ways better able to support and sustain businesses over the long-term, so keep an eye on this encouraging trend.