SpainCap publishes the 'Study of the Impact Investment Ecosystem in Spain from a Private Capital perspective'

100% of the interviewed Spanish private capital fund managers integrate ESG criteria in their investment process and 89% of them audit and verify their impact metrics. These are two of the main conclusions drawn from the "Study of the Impact Investment ecosystem in Spain from a Private Capital perspective", prepared by SpainCap and Attalea Partners. This report responds to the need to grow the impact ecosystem and boost this model in the Venture Capital & Private Equity industry.

In the words of Elena Rico, vice president of SpainCap and chair of the Impact Committee: "we want to homogenize both the definition of impact funds and the instruments for measuring them and build a single definition of impact investing that is solid and international. It is a young sector that is growing rapidly due to the high demand from international entities for the application of these principles".

Interviewed asset managers agree on the need to build a single, robust and international definition of impact investing and include impact as a key factor in their investment. When differentiating ESG and impact, integrating ESG factors into the investment process means having an internal focus on how the company's operation is run, while the impact focus is on the product or service, i.e. at the external level. Both concepts are compatible and complementary.

Impact investors point out the following as challenges they face: the need to attract a greater volume of capital from investors (LPs), standardization of concepts and methodologies, good integration of impact elements and transparency to avoid impact washing, express recognition of impact investment and taxation that encourages it, and an active role of the public sector to create instruments that allow impact investment to grow at scale.

According to José Zudaire, CEO of SpainCap: "We have been supporting these specialized impact managers for some time, including them in the organization to help address their need for understanding by both the Venture Capital & Private Equity industry and public opinion. They need a framework of action in line with their activity and that demonstrates with measurements the positive impact they create in society".

Methodology

In order to carry out this study, 11 firms were interviewed about the definition of the concepts of impact investing and their understanding, how they integrate impact in their investment process and differentiation of the integration of ESG aspects and their positioning in relation to regulation, among other topics. Most of the participants are private capital fund managers specialized in impact investing. Two non-impact entities that manage impact funds of funds have also contributed to the study. All of these entities have been pioneers in adopting impact investing as the focus of their strategy and, therefore, have seen how the concept and the market have matured over time.

About SpainCap

SPAINCAP represents the Private Equity & Venture Capital industry in Spain. Chaired by Oriol Pinya, it brings together over 170 national and international Venture Capital & Private Equity firms, 90 service providers and 17 institutional investors. SPAINCAP members invest with a medium- and long-term view in unlisted companies, from startups to established companies, providing not only stable financing through equity, but also innovation and support to management teams. The Association's mission is to connect all industry players in Spain, representing their interests before the Government, media and public opinion, both nationally and internationally, through alliances and synergies in Europe and Latin America.