Jonah Zahnd

Harvard Business School

Abstract: Significant academic literature treats impact investing as a monolith. We show there is substantial heterogeneity in strategy, practice, and outcomes across impact investing funds. We analyze the 222 impact funds found in the Impact Finance Database, a collaborative effort between the Wharton School, Harvard Business School, and Chicago’s Booth School of Business. This analysis measures and organizes funds into three related but distinct clusters to isolate different characteristics across fund types. We leverage a K-means clustering algorithm to group impact funds, and then measure outcomes and fund characteristics across these clusters. We find evidence to support the construction of an archetypal division between High Finance, High Impact, and High Both groups based on fund differences. Our aim is to provide a basis to better understand the impact investing universe and how different funds differ in design and action.