Do impact-leaders affect the strategy of social and environmental impact funds?

This article studies the relationship between the background of the social impact fund’s leadership team and the fund orientation towards financial performance and impact measurement. By analyzing a sample of 120 fund managers, our results indicate that the presence of leaders with prior social and blended finance experiences reduces the fund manager willingness to reach higher financial returns, implicitly elevating the social impact objective. However, when looking at the likelihood of measuring the generated social impact, the fund’s leaders experience in the finance, blended finance or social sector results to produce no significant effect. Our findings provide empirical support to previous theoretical works on impact investing pointing to the relevance of personal skills as a driver of investment strategies and offer some evidence on the identification of the best practices in this emerging field of investing.