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Impact Investment


Impact investors intentionally seek to achieve positive, measurable, social and environmental impact alongside a financial return. In the UK, it is a fast-growing investment approach.

There are several factors behind this rapid growth:

  • The growing awareness that responsible business behaviour and strong Environmental, Social and Governance (ESG) practices can not only reduce harm to people and the planet but also create value and actively contribute to solutions to societal challenges

  • The emergence of the United Nations Sustainable Development Goals (UN SDGs) – first published in 2015 – as a helpful framework to raise awareness of and address these societal challenges

Tim Farazmand Impact investment in
private equity

  • The rise of a new generation of entrepreneurs, many of them based in the UK, who believe commercial business can play a part in helping to solve these challenges at scale – increasing the availability of investable opportunities

  • The emergence of a new wave of customers (particularly among the millennial generation) who believe their buying choices should align with their personal values, and as such are keen to support ‘profit with purpose’ businesses – creating a sizeable market opportunity

  • The growing body of evidence that by tapping into this market opportunity, impact investment can achieve returns in line with (and sometimes in excess of) traditional investment

It is because of these powerful long-term trends that an increasing number of General Partners (GPs) and Limited Partners (LPs) are integrating ‘impact’ into their core investment model.

The following pages will outline how impact investing works, examine what the current landscape looks like in the UK, and explain why private equity and venture capital have a key role to play in the future of impact investing.


What is impact investment?
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What is impact investment?

What is impact investment?

An introduction to impact investment, tracing the history of this approach and outlining the range of impact-driven investments available.


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Impact investment in private equity and venture capital
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Impact investment in private equity and venture capital

Impact investment in PE & VC

Why the active ownership model means private equity and venture capital managers are well-placed to generate impact alongside financial returns; plus an overview of the BVCA members already involved in this space.

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Impact investment case studies
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Impact investment case studies

Impact investment case studies

Case studies highlighting the opportunity in investing in impact-driven business and the benefits of private equity involvement.


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Acknowledgements

We’d like to express our grateful thanks to the members of the BVCA Impact Investment Advisory Group (IIAG), specifically BGF, Bridges Fund Management, LGT IVUK, Octopus Ventures and Palatine Private Equity.

Further information

FOR FURTHER INFORMATION PLEASE CONTACT THE BVCA

 +44 (0)20 7492 0400

 bvca@bvca.co.uk