In London and For London: Impact investing for the capital

London is a centre for the growing impact investment sector. How can we make sure that this investment is helping meet the city’s challenges?

This report looks at ways to maximise the local benefits of impact investment capital – with five key recommendations on how to support and boost the sector.

What is impact investing?

Impact Investments are investments made with the intention to generate positive, measurable social impact alongside a financial return.

So, when choosing where to put their money, investors consider the positive difference a project will make to society as well how much and how quickly they will achieve a financial return.

We think about investments as falling on a scale from traditional profit-based investing to philanthropy, with impact investing covering a range in the middle.

How can we help support and grow impact investing in London?

In our research we’ve found five key ways to support and grow impact investing in London:

  • Make access to capital more inclusive: Create funds for minority led projects and champion diversity in the sector.
  • Reflect real needs: Asset managers should ask organisations applying for funding to demonstrate that it’s what the people who benefit want and need.
  • Fill gaps in the market: Expand funding for early to mid-stage SME projects seeking £100-300k and blended finance options for projects with deep impact but limited scalability.
  • Build connections and community: To help connect the right type of capital with the right project at the right time, the Greater London Authority (GLA) should provide a forum for investors.
  • Talk clearly about aims and impacts: To reach more people, the sector needs to speak the same language. It should work on common definitions of goals and measurements of impact.