June 11, 2018

Emerging Markets Next on Map for Impact Investing

By Hazel Bradford | June 11, 2018 | Pensions & Investments

Impact investing in emerging markets might be poised for a major growth spurt, as proponents see pension funds and other institutional investors taking an increasing role in a field that largely has been filled by government financial institutions, foundations, and more specialized private equity managers.

Large asset owners are starting to get more interested in impact investing — investments made with companies, organizations and funds that look for measurable, beneficial social or environmental impact, as well as a financial return— in emerging markets partly “because there is a growing recognition of impact investing as a style of investing generally. There are strong returns and very measurable impact,” said Rekha Unnithan, manager of Nuveen’s $650 million impact investing portfolio, where emerging markets account for nearly 40% of the overall strategy. “They are recognizing that this is not just a niche area.”

Emerging markets represent “the fastest growing middle class in the world. If you treat them poorly, you’ll be out of business. If you treat them as clients and treat them with dignity and respect, I think there’s enormous value in being partners with them,” said Gil Crawford, CEO of MicroVest, an impact investing emerging markets manager in Bethesda, Md. MicroVest has a $380 million portfolio providing private debt and equity capital to financial institutions serving micro, small and midsize businesses.

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