The U.S. Small Business Administration (SBA) Impact Investment Fund has tripled in value over the past one year, according to a recently available report put out from the SBA.
This is great news for communities and people interested in the force of social entrepreneurship to increase employment opportunities and economic development in their neighborhoods.
In many sectors, like industries and geographies, the results have not been as robust as investors would love these people to be. A message continues to be brought to professional fund managers with specialties and expertise in areas including educational technology, clean energy as well as advanced manufacturing. Additional area of proven results include investments in distressed communities and low income areas throughout the country. All over the board, SBICs are filling the gaps of capital formation in between market with the low end.
In 2014, the SBA started with two Impact SBICs with a beginning investment of $182 million and because the year came to a detailed, the benefit had grown and also 4 more Impact funds to between $442 and $572 million of total assets under management. The variances are caused by the amount of credit guarantees that happen to be approve after which placed into action.
The point that the value of the social impact investing remains well below the amount of $1 billion amount of leverage which was originally projected and expected, there is certainly still room for more growth and that should have more investors who want to the quest for impact strategies.
It is interesting to remember that three from the Impact SBICs had not placed their capital by January of 2015. The other three funds have managed to purchase 33 different companies across the nation and also have employed an overall of over 4,600 people. These organizations which attracted investments include a Michigan wood wast to pellet manufacturer, a Texas poultry company plus a Puerto Rican educational institution within a low income urban area.
The name from the fund was changed on the Impact Investment Fund in the Impact Investment Initiative, which is a simple, but a very meaningful change, as it more aptly describes the fund and making it a permanent feature. The strategy of the fund is located around the application of rapidly evolving strategies which utilizes the mixture of financial gains along with social gains and returns in investment gaps in narrow niches.
In addition your time and money options from within the various funds themselves have already been capable of utilize more individualized strategies including:
– Taking off the $200 million cap with the ability to offer Impact SBICs with additional and better leverage.
– Removing the waiting period in regards to the usage of leverage commitments in various areas.
– The opportunity to allow SBICs to opt-into this fund family, in case the Impact Fund requirements are satisfied.
One of many factors which has helped the growth of the SBA Impact Investment Fund has become the opportunity to adopt standards and methods from the social impact area in the measurement of those factors.