Impact Goes Mainstream: Talent Trends in the Age of Impact Investing

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Kurt Harrison
October 02, 2019
13 min read
Sustainable LeadershipSuccessionBoard and CEO AdvisorySustainability OfficersExecutive Search
Lack of clarity, continuity and reporting on different types of impact investing, resulted in a gap in the understanding of profiles of talent leading investment strategies.

Executive Summary

The explosive growth in demand for investments that simultaneously generate positive social good alongside meaningful financial returns has led to a parallel explosion in impact investing over the past several years. Despite the pervasive focus on the growth of impact investments, relatively little data exists on the evolving profiles of the leaders who are driving this sea change in global investment management.

To address this gap, Russell Reynolds Associates conducted its own proprietary analysis of the investment leadership teams of 76 impact investing organizations. We reviewed the profiles and backgrounds of all senior leaders making investment decisions and classified their organizations into three categories: impact-first firms that prioritize impact over investment, return-first firms that prioritize return over impact and those we are terming balanced-approach investors, which sit somewhere in between.

Our findings indicate that, while specific hiring priorities will vary by type of organization, several trends can be identified:


These trends imply that hybrid capabilities and a focus on diversity will be crucial in the next years and will define the longer-term direction of the industry.

Introduction and purpose of this study

The term “impact investing” is as misunderstood as it is omnipresent in both the social impact and investment management worlds. While it can convey radically different meanings to different constituencies, its current and growing prevalence across both the philanthropic and for-profit communities is undeniable. Impact investing has clearly moved away from its binary early days, when it was considered a fringe or niche area for both asset managers and philanthropies that historically focused either on grant making or on generating market returns. Instead, both sides have steadily begun to move toward the middle of the spectrum, recognizing that social impact and financial returns are no longer mutually exclusive. Global investors are demanding strategies and vehicles that generate sustainable social and environmental impact alongside meaningful financial returns. Meanwhile, philanthropic funders recognize that traditional giving and aid-based models need to change as the issues they seek to address persist and evolve. The United Nations too is calling for significantly more private sector involvement in order to reach the Sustainable Development Goals (SDGs) by 2030. The public/private push toward a more defined and measurable approach to impact investing is relentless and will only intensify in the coming years.

The global pools of capital dedicated to impact investments continue to grow prodigiously—the Global Impact Investing Network (GIIN) recently estimated the current value of global impact investments to be $502 billion, up from $114 billion in 2016.1 However, significant challenges remain in defining and sizing this market due to the often murky and overlapping labels applied to “socially conscious investments.” Impact investments are differentiated from environmental, social and governance (ESG) investing due to their focus on measurable, positive impact as an outcome. Whereas ESG investments focus on using ESG factors as a risk-mitigation strategy or negative screen, impact investments elevate positive social and environmental outcomes as an explicit goal of the investment, alongside financial return. These investments are increasingly instrument agnostic, employing a range of instruments across the equity, debt and recoverable grant spectrum, and are primarily concerned with sustainable societal impact.

The lack of clarity, continuity and reporting on the different types of impact investing has resulted in a glaring gap in the understanding of the typical profiles and types of talent leading these investment strategies. To address this gap, Russell Reynolds Associates has undertaken this proprietary study in order to answer several important questions:



In early 2019, RRA mapped the investment leadership teams* of 76 impact investing organizations, resulting in the detailed analysis of 360 investor profiles. We noted names, titles, gender, nationality and academic and professional experience of every senior leader with direct authority over investment decisions, based on publicly available information. To ensure that we were including all senior team members involved in making investment decisions, for the purposes of this analysis, “impact investment leadership” includes founders, partners, managing directors, investment directors and regional directors.

We categorized each organization according to their ownership structure (whether they were asset owners or asset managers) and profit structure (whether the firm itself was for-profit or nonprofit). This enabled us to create the 2x2 model below, which visualizes the spectrum of impact investing in a multidimensional format and separates the “impact-first” firms (nonprofit asset owners who typically prioritize impact over returns) from the “return-first” firms (for-profit asset managers who typically prioritize returns over impact). Importantly, our model also accounts for those firms that reside somewhere in the middle of the spectrum, a category we have termed the “balanced approach,” which includes nonprofit asset managers as well as for-profit asset owners.


The categorizations of our sample of 76 organizations resulted in a relatively even distribution, with 29 percent of those included in the analysis meeting the “impact-first” definition, 29 percent meeting the “balanced approach” and a final 42 percent meeting the “return-first” criteria. The sample also includes a range of total assets under management (AUM) within each firm’s impact investment portfolio, with an average of $382M AUM in impact investments across the sample.
*Team composition as of December 2018

Typical profile of impact investors

Our analysis of the backgrounds of 360 leaders from 76 impact investing organizations of disparate size, geography and investment focus reveals several important insights about the typical investor profile and “route to the top”:


Industry background

The majority of impact investing leaders comes from either a purely financial services background or a hybrid of financial services and other private sector industry experience. Among those with purely financial services backgrounds nearly two-thirds come from banking or other financial services subsectors, while another third come from the private equity world and a handful comes from the development finance world.

A further 17 percent come from a hybrid financial services and nonprofit background, while 18 percent come from a purely nonprofit or public sector background. A final 1 percent come from a non-financial services industry within the private sector.

Across all backgrounds, most investors (95 percent) have some financial services experience in their background.


Profile of organization types

The categorization of impact-investing firms into (1) impact-first, (2) balanced-approach and (3) return-first organizations reveals several important and differentiating characteristics of the senior leadership in each category. See Methodology box on page 4 for more detail on how organizations were categorized.


Impact investors from firms that take a “balanced approach” have the longest average tenure (seven years), compared to six years among return-first and four and a half years among impact-first organizations. Perhaps unsurprisingly given the diversity challenges in the investment sector, impact-first organizations have the highest rates of gender diversity, with 51 percent of investors being female versus 31 percent among return-first firms. Across both return-first and impact-first organizations, roughly 4 in 10 senior leaders were internally promoted into their current role, while firms adopting a balanced approach were much more likely to externally hire their most senior leaders.

Whereas impact-first and return-first organizations have a wealth of talent to draw from within the existing foundations and PE firms from which the impact investment funds often derive, it makes sense that balancedapproach investors would be more dependent on hiring outside talent.


Region of origin and investment

Impact-first organizations have the highest rates of investors from the global south (16 percent) versus 9 percent and 10 percent for their return-first and balanced-approach counterparts, respectively. This pattern is even more visible when looking at the regions in which they invest, with 60 percent of impact-first investments going to firms in the global south versus 17 percent and 23 percent for return-first and balanced-approach firms, respectively.


Leadership profile by organization type

Differences between the various types of investment organizations become even more apparent when comparing the talent profiles they prioritize. Unsurprisingly, impact-first organizations employ a much higher percentage of senior investment leadership from the nonprofit or public sectors: Forty percent of senior investors at these organizations have only ever worked in the social sector, with another 31 percent coming from a hybrid nonprofit and finance background. Fewer than a third of these investors have only ever worked in the private sector. Given the prioritization of impact over returns among these organizations, it makes sense that they would similarly prioritize leadership profiles with a greater understanding of the social sector. Expertise in identifying effective interventions, knowledge of how to monitor and evaluate those interventions and utilizing existing networks within the non-governmental organization (NGO) and funder communities are valuable skills for an impact-first investor.

Conversely, return-first and balanced-approach investors characteristically employ a much higher percentage of leaders who come from a purely private sector background, with return-first organizations showing a slightly higher preference for a purely finance background: Seventy-six percent of balanced-approach investors come from the private sector versus 85 percent of return-first. For these organizations, knowledge of capital market dynamics, experience conducting due diligence and quantitatively assessing investment opportunities are the highest priorities.

Impact Investing_1.2.png

Finance experience by organization type

All impact investors included in the analysis across balanced and return-first organizations have some financial services experience in their background, as do most of those from impact-first organizations.


Profile over time by organization type

Differences between the organization types are even more stark when looking at how the talent profiles of each have evolved over the last ten years. Whereas the return-first and balanced-approach firms have remained remarkably consistent in the talent that they employ (with only a slight increase in the percentage of leadership with a hybrid finance and nonprofit background), impact-first organizations have seen a significant transformation in their senior talent pool.

Whereas ten years ago two-thirds of impact-first senior leaders came from a purely social impact background, leaders appointed since have become decidedly more varied in their expertise. As emphasis on this type of purely social impact expertise has declined, leaders with purely private sector and hybrid finance and nonprofit backgrounds have become more common.

This trend is likely driven by the ongoing professionalization of the impact-investing market generally and impact-first organizations specifically. As increasing numbers of donors and investors regard impact investment as a legitimate asset class, impact-first organizations are feeling ever more pressure to adopt the due diligence and investment screening practices of traditional asset management firms.


Implications for leaders and boards

The pressure on C-suite executives and boards to create credible impact investing vehicles will continue to intensify as their investors demand strategies that offer material and measurable impact alongside market returns. Given the scarcity of senior investment talent with a portable “track record” in impact investing, it will be crucial to cultivate the next generation of impact investing leadership from both the nonprofit and investment management worlds. The early signs are encouraging, especially from a diversity perspective, with senior impact investors representing far more gender diversity than the asset management industry overall.

The cross-pollination of talent between the public and private sectors will only accelerate as both sides begin to accept the value provided by more diverse perspectives. Impact-first organizations will benefit from adding more rigorous investment acumen to their strategies, while return-focused firms are already realizing how a long-term impact orientation can improve long-term returns. Family offices and family foundations have already taken the lead in this cross-pollination, with both types of organizations hiring leaders who can conduct both rigorous financial analysis for high ROI deals, but also be able to make the types of high-risk, high-impact investments that require more of a grant-making mentality. These hybrid capabilities and perspectives will continue to define bestin-class impact investing strategies going forward.


Lucia Ferreira is a Consultant in the firm’s Nonprofit Sector and Global Development Practice. She is based in New York.

Kurt Harrison is a Consultant in the firm’s Financial Services Sector and Investment Management Practice. He is based in New York.

Joy Wiersum is a Consultant in the firm’s Nonprofit Sector and Global Development Practice. She is based in London.

Vanessa Di Matteo o is a Knowledge Associate in the firm’s Nonprofit Sector. She is based in London.

Emily Meneer is the Global Knowledge Leader for the firm’s Nonprofit Sector. She is based in Boston.



1. Global Impact Investing Network (GIIN), Sizing the Impact Investing Market (April 2019).

2. Firestone, Karen. “When Will We See More Gender Equality in Investing?” Harvard Business Review, March 25, 2019.