Canada’s impact investing sector has reached $15 billion, according to a new report by SVX, a provider of services to investors, funds and a variety of organizations. Last year saw the launch of 66 products — directed at a sector still largely concentrated in private markets.
SVX reported that 49% of impact investment products are bonds or debentures. “This reflects the prominent role of community bonds in financing localized projects such as affordable housing, cooperatives and clean energy,” according to the Canadian Impact Investing Market Performance Report.
Another 20% are private equity or venture capital fund investments. That comparatively small percentage accounts for 49% of total assets under management, however.
“The gap between product count and capital reflects a dual-track market: one rooted in grassroots investment, the other driven by institutional capital targeting systemic change,” reads the report.
More than 70% of impact investment products are based on at least a five-year term, “reflecting the patient capital model typical of the sector,” according to SVX.
The industry is heavily concentrated in Ontario. The province is home to 60% of product manufacturers. Next is B.C., where 17% of products are headquartered. Quebec is home to 11%, and Alberta has 4%.
Returns uneven
SVX reported on the returns of 82 impact investments, relative to corresponding public market indexes or comparable Government of Canada bonds.
Just 21% delivered above-market annual returns. More than one-third (36%) underperformed, and 43% produced at-market returns. Those figures were self-reported, during October and November 2024.
“Loan funds, bonds and debentures provide stability, making them attractive to investors seeking predictable income,” SVX said. “While some bonds sacrifice financial performance for impact, others align with market rates, balancing social objectives with financial viability.”
Private equity and venture capital investments “offer the highest upside,” according to the report. “Concentrated in high-growth sectors like cleantech and health innovation, these investments appeal to investors willing to embrace higher risk.”
SVX says its report is the first of its kind. It is designed to track capital flows, investment structures and market trends.