Scaling up institutional investment for place-based impact: White Paper (May 2021)

The Good Economy, Impact Investing Institute and Pensions for Purpose have joined forces to produce this white paper on place-based impact investing (PBII) to mobilise more institutional investment to address place-based inequalities and support more inclusive and sustainable development across the UK.

Based on extensive consultations with market actors and stakeholders, the white paper builds a sound evidence base for place-based impact investments, delivers a framework for place-based impact investing measurement, management and reporting and provides a critical review of existing institutional asset management models.

What is Place-Based Impact Investing (PBII)?

The Place-Based Impact Investing Project offers the following definition of PBII: "Investments made with the intention to yield appropriate risk-adjusted financial returns as well as positive local impact, with a focus on addressing the needs of specific places to enhance local economic resilience, prosperity and sustainable
development."

What are the opportunities of PBII?

The Local Government Pension Scheme (LGPS), the empirical focus of this project, could itself become a pioneer of PBII in the UK, showing the way forward for the multi-trillion pound pensions industry.

The white paper includes an original analysis of market data which demonstrates that investments within the sectors that are key to PBII - affordable housing, SME finance, clean energy, infrastructure and regeneration – can deliver risk-adjusted financial returns in line with institutional investor requirements.

If all LGPS funds were to allocate 5% to local investing, this research found, it would unlock £16 billion for local investing, more than matching public investment in the £4.8bn Levelling Up Fund and associated government initiatives.

Who is involved in the PBII Project?
This research project has been supported by the Department for Digital, Culture, Media & Sport, the City of London Corporation and Big Society Capital. Our approach to the project has been collaborative and consultative throughout, with LGPS funds, local authorities, fund managers and other stakeholders contributing advice, guidance and practical support throughout the project work.

• To receive updates about the PBII Project and information about opportunities to participate in its next phase, sign up here.