Featured GIIN Publication

Impact Investment Products Responding to the Economic Impacts of COVID-19 in Emerging Markets

Understanding investor preference and informing product design

Global Impact Investing Network July 30, 2020 Pete Murphy, Katharine Zafiris

The COVID-19 crisis is causing immense health and economic impacts around the world. Despite this dire global climate, impact investors remain committed to their work, and are maintaining, and in some instances increasing allocations to emerging markets.

As part of the GIIN’s Product Development Platform, the GIIN hosted three successive Product Structure Workshops in April, May, and July 2020, which were intended to shed light on investor requirements for products that specifically respond to COVID-19, and to provide the managers structuring those products with feedback. Each workshop featured two fund managers, presenting in-development fund products in front of a panel of asset owners, representing diverse institutions and clients. All of the products tested were a direct response to the economic impacts of COVID-19, though several had begun the structuring process pre-COVID-19 and shifted their focus accordingly in light of the macro-environment. Collectively, they sought to raise between USD 495 million and USD 532.5 million for SMEs and Non-Banking Financial Companies (NBFCs) in emerging markets. The funds targeted several SDGs, particularly SDG #5: Gender Equality (three of the six funds targeted SDG #5) and #8: Decent Work and Economic Growth (all six funds targeted SDG #8), and three of the six funds planned to use IRIS+ metrics to measure impact performance.

This issue brief provides a synthesis of the key takeaways from these Product Structure Workshops, including: features of investment products targeting companies impacted by COVID-19, key drivers and constraints, investors’ motivations for investing into COVID-19 related funds, and more.

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