According to the Global Impact Investing Network (GIIN), in 2024 there were more than US$1 trillion in assets under management allocated towards achieving social and environmental benefits alongside financial returns. What are the most popular forms of these assets and how do family offices approach them? This article breaks down the key information.

Five key impact investment asset classes:

1. Listed equities

Shares in publicly traded companies with strong environmental, social, and governance (ESG) or impact-focused profiles are a key asset class in impact investing. 

According to Morningstar, in Q1 2025 over US$3T was invested in sustainable funds around the world despite US$8.1B outflows due to geopolitical challenges. In Q4 2024, there were inflows of US$18.1B. Norway’s sovereign wealth fund, almost three-fourths of which is allocated to public equities, has 11% of its equity portfolio invested in climate solutions. 

In 2024, GIIN found that impact investors made the largest deals in listed equities, with an average size of US$13.6M.

2. Seed and venture capital

Impact seed and venture capital fuels innovative, impact-driven startups in sectors like electrified transport and clean tech. 

According to GIIN, investments in seed- or venture-stage companies accounted for only 9% of AUM allocated by impact investors. These types of investments are growing rapidly in popularity, however, with AUM allocated to seed-stage companies rising from US$1.3B in 2019 to US$94.6B in 2024 for a survey-high CAGR of 136%. 55% of survey participants had made venture allocations; only growth-stage allocations were more popular. The AUM allocated to growth-stage companies actually fell 12% between 2019 and 2024, indicating that the relatively fewer early-stage impact investors were relatively more bullish.

3. Green, Social and Sustainability (GSS) bonds

GSS bonds finance projects with specific social or environmental outcomes, with US$955B issued globally in 2024. Examples include green bonds for reforestation and social bonds for affordable housing. 

The main issuers of GSS bonds include supranational organisations like the European Investment Bank (EIB), sovereign governments, financial institutions, and corporations. According to the World Bank, as of June 2024 79% of such instruments having been issued by sovereigns were green bonds.

4. Private equity

GIIN found that private equity was the most preferred impact asset class for investment managers and foundations, who respectively allocated 49% and 59% of their AUM to it. It was institutional asset owners’ second favorite asset class after public debt.  

Private equity impact investors typically expect to achieve competitive financial returns, and according to Schroders Capital they often do so. The firm found that private equity impact investments achieve an average IRR of 21% (with some as high as 30%) versus industry averages of 16.5% and 13.7% for buyout and growth investments, respectively.

5. Debt

GIIN found that with respect to aggregate AUM, private debt accounted for the most transactions (35%) and volume (25%) in 2024. There were far less transactions and volume associated with equity-like debt – which offers equity-like returns with debt’s stability – but the average equity-like debt deal was worth US$11.2 million: second-only to the average public equity deal size. 

This pattern reveals a strategic approach among impact investors: while private debt dominates transaction volume, the substantial average deal size for equity-like debt suggests investors are willing to deploy significant capital when they can secure both the downside protection of debt instruments and the upside potential typically associated with equity positions. 

Supporting the family office approach to impact investing

Regardless of the types of impact investing assets they hold, ultra-wealthy families appear to take a highly strategic approach to impact investing: they make fewer, larger, and more deliberate investments versus other types of investors like foundations, investment managers, and enterprises. 

GIIN’s findings revealed that family offices were pursuing: 

• Conservative growth: while investment managers were planning a massive 29.4% expansion (from US$42.9B to US$55.5B) in 2024 vs. 2023, family offices planned for a more measured 5.6% increase from US$485M to US$512M in planned volume. These results suggest that family offices take a more patient, relationship-driven approach rather than aggressive scaling.
   
• Quality over quantity: family offices completed 118 deals in 2023 but were planning only 83 in 2024 – while maintaining the same deal size of US$18 million. Investment managers and foundations also aimed to keep deal sizes at the same levels, but they both aimed to scale up deal count – even more than doubling it in the case of investment managers.

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