Future Returns: How Impact Investors Balance Objectives
By Abby Schulz
Wed, Jan 20, 2021 6:41am
4 min
4 min
Impact investors aim to achieve specific, positive social or environmental goals such as creating more affordable housing, or reducing reliance on fossil fuels, but they do so to earn market returns too, while weighing other standard investment considerations such as risk and liquidity.
That’s a key finding of “Impact Investing Decision-Making: Insights on Financial Performance,” a report published last week by the Global Impact Investing Network (GIIN) that assesses investor attitudes toward financial performance based on outstanding studies by outside firms and an analysis of financial performance that was gleaned from its annual survey of impact investors.
“What’s important here, and what we’re delighted about, is that financial performance is an important consideration for impact investors, but they are really looking at it taking into account a number of considerations,” says Dean Hand, director of research at the GIIN.
To weigh impact alongside performance is not unusual in the sense that traditional market investors also weigh a number of things. Risk and return, for instance, are factors commonly taken into consideration in balance with one another.
To invest in an emerging market company might lead to higher returns than a similar investment in a U.S. firm, but it’s riskier, bearing a higher potential of falling apart, so investors have to decide how much risk they are willing to stomach to get the returns they want.
The GIIN’s survey results have shown that impact investors generally get the balance they are seeking—nearly 88% in the most recent survey say that their portfolios meet or exceed their expectations for returns.
But when investors care about creating a positive social or environmental impact, they also weigh traditional investment considerations, such as liquidity—do they need their investment cash back soon or can they wait? If the latter, an investor may be more willing to invest in a private equity fund with a longer time horizon, and a different set of impact outcomes than might be available via a green bond, for instance.
If they are a more conservative investor, too, not willing to shoulder a lot of risk—a highly rated green bond may be just the thing.
The Importance of Manager Selection
The GIIN’s report looked at how impact investments in private markets have performed, culling data from available research by groups such as Cambridge Associates and Symbiotics as well as its own investor survey.
Private-equity impact investments, for instance, can deliver high returns, outperforming the S&P 500 index by 15%, according to a study by the International Finance Corp., although a University of California study found the median impact fund had an internal rate of return (IRR) of 6.4% compared with 7.4% for the median “impact-agnostic” fund.
And results can vary widely. The GIIN’s survey data showed that the top 10% of private-equity portfolios in emerging markets had realized returns of more than 29% while the bottom 10% had returns below 6%.
As a result, the GIIN finds that fund manager selection matters, not just in terms of quality, Hand says, but in helping the investor understand “whether or not they are achieving what they want both in terms of financial performance and impact performance.”
Investors also have to ask the right questions, Hand says. For example, it’s important to ask questions like: What specific impact results a manager is getting? How are those results measured? How do you convey this information to investors?
Where these have been successful, particularly in impact investing, is where the AO and AM work together to derive what results they are looking for, what their objectives are, and how they are going to report on those results.
“Good asset-owner and asset-manager relationships are built on a close working relationship,” Hand says. “Where these have been successful, particularly in impact investing, is where the asset owner and asset manager work together to derive what results they are looking for, what their objectives are, and how they are going to report on those results.”
Performance in Private Debt, Real Assets
According to the report, private debt funds focused on impact have tended to provide low-risk returns, as most investors expect, while delivering stability as well as diversification to impact portfolios.
The GIIN survey data showed average returns for impact debt funds ranged from 8% for developed market funds to 11% for emerging market funds, while Symbiotics data found a weighted average yield of 7.6% for fixed-income impact funds, the report said.
Investing in real assets, such as real estate and timberland, can lead to good returns, but the results vary widely depending on the time horizon as well as the type of investment, the report found. Investors surveyed by the GIIN reported returns ranging from 8% to 23%—again, pointing to the need for investors to select the right asset managers.
Case Studies
To give a sense of how experienced impact investors balance all these factors, the report offers examples from five experienced impact investors.
IDP Foundation, a private nonprofit focused on access to education and poverty alleviation, invests for impact from its endowment as well as through program-related investments. The foundation cares about achieving high impact but also competitive, market-rate financial returns.
The GIIN looked at five major factors the foundation weighs before deciding on an investment: financial return objectives, impact objectives, financial risk, impact risk, resource capacity, and liquidity constraints.
It turns out IDP considers its financial return and impact objectives to be “very important,” while financial risk—or the volatility of expected returns—and impact risk are “important.” The foundation’s resource capacity is less important, as it leans on a consulting firm as an advisor, and screen service to make sure it doesn’t invest in anything that violates its impact goals.
“What we hope by these spotlights is that it will give investors an idea of how those things are actually playing out so they can match that in their own decision making,” Hand says.
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Randy Boyagoda’s new novel, “Lords of Serendipity,” delivers a biting satire of cheating, politics and dysfunction across modern universities.
By
Thu, Sep 3, 2026 5 min
5 min
Administrative cowardice. Rampant cheating. The soaking and scamming of undergrads and grad students. Performative wokeism. Intensifying competition for international tuition dollars from an expansive China.
These are either the latest dire headlines about American higher ed or the myriad subplots of “Lords of Serendipity,” an ambitious new novel by Randy Boyagoda. Unlike most campus fiction, its scope extends well beyond the cloister of the liberal arts classroom to whammy the entire university system, from its financial model to its function within a globalized economy. Along the way, it skewers its lightning-rod targets with a precision too sharp to be considered entirely fictional.
That its author is not only well-versed in satire, having written four other novels in the genre, but is also a professor of English at the University of Toronto and an experienced college administrator, further blurs the lines between comic fiction and brutal fact. It’s the kind of no-holds-barred book only a consummate insider would know to write—but only one who is also conveniently outside the American university system could get away with writing.
“This is someone who’s got the inside dope on what can go on at universities, especially with international students, and what kind of con games are going on,” said Margaret Atwood, a friend and fellow Torontonian.
The novel, like Boyagoda himself, is often very funny—even as the dilemmas its characters face read as tragedy. Its cast includes the bickering members of a Sri Lankan hotel cleaner’s family, insecure American freshmen, dead-end third-tier college professors and their highflying Ivy League counterparts and dispirited university functionaries. An old-fashioned Dickensian tale, it sweeps across continents and campuses, from a classic liberal-arts college to a stand-in for Harvard University to an urban technical school to the dilapidated buildings of a state-run university in Sri Lanka.
“I’m a joyful person,” Boyagoda said in an interview, though he prefers to see his outlook on academia as “hopeful” rather than optimistic. He smiles and laughs frequently. He bikes everywhere. He derives energy from his students and from his four daughters, ages 14 to 20. They help him and his American wife, Anna, also an educator, care for Boyagoda’s father, an immigrant from Sri Lanka who has dementia and lives with the family.
The germ of the novel came to Boyagoda during the pandemic, when he was serving as a vice-dean. An urban legend was circulating about a statistics grad student selling passing grades to international students. The cheating scheme itself may well have been apocryphal, but it felt tantalizingly plausible.
“As a novelist, it stayed with me,” Boyagoda said. “Who would sell grades for a stats course? Why would someone buy grades? What’s motivating them? Why wouldn’t the university be doing something about it?” What he didn’t want to do, he explained, was write “another novel about a creative writing professor and his drama with students.”
In addition to writing novels—the first of which was a finalist for Canada’s prestigious Giller Prize; he’s written eight books in total—Boyagoda teaches literature full-time. For his students next semester, kids raised in a purportedly “post-literature era,” he’s assigning three 700-page novels, he noted mischievously, books by George Eliot, Ralph Ellison and Kiran Desai.
On RateMyProfessors, students remark on Boyagoda’s heavy assignments, tough grading and distaste for cellphones, but also hail his “comedy.” When alerted to these reviews, Boyagoda laughed. “Guilty as charged,” he said.
“Randy’s one of those people in academia who is very well educated but doesn’t have an ounce of superiority about him,” said John Irving, who frequently guest lectures in Boyagoda’s classroom. “It’s amazing to see how willing students are to talk in his classrooms, how little afraid they feel of being mocked or put down—he gets complete candor out of them.”
Negotiating competing interests seems to come naturally to him. Like many college campuses, after the Oct. 7 Hamas attack on Israel, the University of Toronto was embroiled in protests, encampments and discord; part of the school’s response was to convene a working group on civil discourse. Boyagoda was put in charge, serving for two years. It’s the kind of thankless task many professors would flee from, but Boyagoda relished the prospect and thinks the group, which is ongoing, made progress.
He has since pivoted to another formidable academic concern: the waning prestige of the humanities. In July, Boyagoda became the director of the Jackman Humanities Institute and special advisor on the humanities to the dean of arts and science. This fall, he is starting a series of gatherings he calls the Dead Book Club. (Dead writers feature heavily among his favorites: St. Augustine, Dante, William Faulkner, Evelyn Waugh, Saul Bellow.)
“The goal is to encourage students to read for its own sake and have conversation for its own sake,” Boyagoda said. “The importance of the humanities will be revealed to those who participate.”
“Lords of Serendipity,” which publishes next week, reflects Boyagoda’s commitment to the pursuit of knowledge: “I’m supposed to say I learn more from my students than they do from me, but no,” Boyagoda said. “I enjoy sharing my excitement and joy about literature and ideas. There are these moments when you are teaching and you can see someone’s face change because they didn’t know something and then they did. That moment when you’re actually watch someone enlarge themselves is deeply satisfying.”
In literary circles, Boyagoda is often referred to as a Catholic novelist, a description he embraces. “A novelist willing to give shape and voice to contemporary religious experience is needed,” Boyagoda said. “I understand myself as a Catholic novelist, provided that I’m not only a Catholic novelist, I’m also a South Asian novelist and I’m a Canadian novelist. I don’t want to be captive to one label.”
His characters, he said, are subjected to what he calls “Graham Greene character situations.”
“They are trying to do good in a fallen world and realize the most they can do is less harm than someone else would do in that same role,” he explained. “They have to accept they are complicit in something that provides some good thing to others. It’s a very Graham Greene way of thinking about sacrifice.”
The campus green they inhabit is a febrile zone in which lofty ideals and cynicism regularly collide. It’s a place where a traditional holiday college celebration is now an occasion for political protest. Kids freely police one another inside and out of the classroom with social media their constant, ready weapon of choice. International students, knowing their family’s financial futures hinge on their degrees, operate in terror of failure and deportation.
Early readers of the book include Gary Shteyngart and Junot Diaz, both of whom have taught at universities and written comic novels. They each contacted Boyagoda midway through to say, in essence, “You nailed it.”
As biting as “Lords of Serendipity” can be, Boyagoda’s faith in higher education remains undaunted.
“It’s absurd that we live in societies that make the decision to take people between the ages of 18 and 22, when they are most physically capable of contributing to our nations and communities, and tell them, ‘Go away for four years, and read and learn and have conversations,’” he said. “I want students to be aware of what an incredible privilege that is.”
Corrections & Amplifications
Randy Boyagoda is a special advisor on the humanities to the dean of arts and science at the University of Toronto. An earlier version of this article incorrectly said he is a special adviser to the dean of humanities. (Corrected on Sept. 2)
