Impact investing – combining market returns with outcomes
Impact investing is continuing to gain momentum in the global investment industry. Increasingly, investors are aligning capital with impact objectives, as they recognize that well-directed investments can deliver both competitive returns and meaningful social and environmental outcomes.
With more than 20 years of experience in integrating ESG considerations across asset classes, we have continuously evolved our approach to sustainable investing. Building on this foundation, impact investing represents a natural progression of our philosophy – one that extends beyond traditional ESG integration by emphasizing intentionality, additionality and measurability. By setting clear objectives and seeking evidence of positive change, our impact strategies represent a further step in aligning investment activities with real-world outcomes.
The impact investing market has evolved from a niche allocation to a meaningful and institutionalized component of private market portfolios. As of the end of 2024, more than EUR 700 billion of capital has been committed to impact strategies globally, with over 110 new funds launched in the past year. While the rate of new capital flows has moderated amid increased market volatility and the growing debate around ESG – especially in the US – investor demand for resilient, purpose-driven assets remains robust.
Figure 20: Total impact capital committed
Private equity remains the largest asset class in impact investing, followed by real assets, which highlights how the opportunity set has broadened and diversified across sectors.
Figure 21: Private equity is still the largest asset class followed by real assets
At LGT Capital Partners, we focus our impact strategy on three key themes: climate action, healthcare and inclusive growth. These priorities define our investment approach and reflect the areas where we believe private capital can deliver measurable outcomes.
Figure 22: Core impact themes
To explore these topics in more depth and access supporting materials, please see the resources below:
To illustrate our approach to impact investing in practice, we highlight selected case studies from across private equity and private debt.
Fund investment case studyVidia Equity – driving industrial decarbonization
Vidia Equity was founded in 2022 with a mission to accelerate net zero by driving industrial decarbonization in the highest emitting sectors. Its inaugural climate impact fund, closed in 2023, focuses on scaling mid-cap companies active in renewable energy, recycling and energy efficiency.
Co-investment case study:Outcomes First Group – specialist education for students with high complexity needs
Outcomes First Group (OFG) is a leading UK provider of specialist education for students with high complexity needs. With more than 75 schools and 4,500 students, OFG addresses a critical structural gap in special education, consistently achieving top regulator ratings.
Direct lending case study:RCI Group – expanding capacity, empowering communities
RCI Group is a UK-based provider of critical health, justice and social services. Its work has supported over 84,000 survivors of sexual assault, 20,000 individuals in court and 32,500 individuals with mental health needs. As part of our impact debt portfolio, we are partnering with RCI to embed measurable impact KPIs into its growth strategy.
