Impact investing at 246 million, but investments decrease

The capital available for impact investing is growing in Italy but investments are decreasing. With €246.4m in 2023 (up 6.7% on the previous year's €231m), however, real annual investments in impact initiatives are decreasing, from €37.4m in 2022 to €20.7m in 2023 (-49%). This is what emerges from the Impact Report 2023 by Social Venture Foundation Giordano Dell'Amore, which publishes a survey on the trend of the Italian market of impact investing, investments with a social and environmental impact.

The decrease in the amount invested against the increase in the number of annual investments (58 in 2022 against 68 in 2023), leads to a decrease in the average investment ticket, from EUR 650,000 in 2022, to EUR 300,000 in 2023. This decrease is mainly due to uncertainties in the market's growth prospects, which, similarly to what happened in traditional venture capital, drove many operators to caution.

But apart from the cyclical element, the size of the investments remains small over time, albeit growing. In 2017 there were only three operators with EUR 46 million and six million were invested that year. Today there are nine operators with 246 million and 20 invested in 2023. "We refer to the 'strictly impact' approach, which, unlike investments made with ESG (environmental, social governance, ed.) criteria, aims to achieve measurable and intentional social, environmental or cultural impact objectives, together with obtaining a financial return," explains Mario Gerevini, board member of Giordano Dell'Amore Social Venture Foundation. In short, these are investments that have a transformative and sometimes additional character, i.e. in market failure realities. The operators going in this direction are: Oltre Venture, Oltre III, Social Venture Giordano Dell'Amore Foundation, SocialFare Seed, Sefea Impact Sgr-Manager EuVeca, a|impact Sicaf EuVeca, Opes Italia Sicaf EuVeca and The20Fund, as well as Phitrust (the only non-Italian investor).

"With reference to the Italian market of investors active in impact investing with the priority intention of generating a measurable impact, it is possible to hypothesise that by 2025 the capital available for impact investments realised with a so-called 'Impact first' logic, or 'Investing for impact', could exceed the 300 million threshold, reaching 325 million assets under management. "This approach has great transformative potential for the financial industry, which I hope the impact investing movement can succeed in preserving and spreading," adds Gerevini.

The Social Venture Giordano dell'Amore Foundation invested a total of EUR 10.2 million in 48 entities (17 new investments in 2023). A quarter of the investments were dedicated to the creation and strengthening of vehicles active in the field of impact investing with the aim of having a multiplier effect. In particular, the foundation dedicated 2.5 million to investing in 4 funds active in the sector, participating in the creation of a|impact Sicaf EuVECA and Opes Italia Sicaf EuVeca and in the strengthening of Oltre Venture and Sefea Impact Sgr-Manager EuVeca.