The gap between the demand for and supply of impact investment capital in the Chicagoland area is as much as $100 million, a figure that could rise to $400 million in coming years, a report from the John D. and Catherine T. MacArthur Foundation and the Chicago Community Trust finds. According to the report, Bridging the Gap: Impact Investment Supply and Demand in the Chicago Region (20 pages, PDF), growing local interest in impact investing — investments that address social and environmental problems while generating financial returns for investors — is hampered by fragmented supply and demand and a lack of efficient and scalable mechanisms that can bridge the gap between the two. Given the mismatch between the needs of investors and investees in the underwriting process, the amounts of capital involved, and the cost of capital, the report argues, mobilizing new investments will require a marketplace that more efficiently aggregates supply and demand, does a better job of vetting organizations’ readiness for investment, and allocates capital through a variety of channels. As new mechanisms are created, the report further notes, investors will need to share knowledge about how these platforms work in practice and how they measure the impact of their investments.
Bridging the Gap: Impact Investment Supply and Demand in the Chicago Region | Connections | PND