Timber, RE impact funds lead returns race

The Global Impact Investing Network’s latest report found similar return rates between top quartile impact funds, while median IRR was mixed.

Top quartile impact investment fund returns are exceeding those of the best performing traditional funds in some asset classes, according to a report by the Global Impact Investing Network and Cambridge Associates.

Top quartile timber impact funds returned 8.6 percent between 1997 and 2014, compared with 4.2 percent for non-impact, top quartile timber funds, the data show. Median returns of impact funds were 5.9 percent, compared with 3.3 percent for non-impact timber funds.

The results were more mixed for real estate and infrastructure funds. Top quartile real estate impact funds returned 15.9 percent, compared with 13.8 percent from non-impact funds, but the median return for impact real estate funds was 6.9 percent below that of non-impact funds.

In infrastructure, impact returns were lower than non-impact funds. Median returns for impact funds was 2.5 percent, compared with 6.5 percent for non-impact.

The findings were based on data from the Cambridge Associates Real Assets Impact Investing Benchmark. It focused on 55 timber, infrastructure and real estate impact funds, with vintage years between 1997 and 2014.