Investment Time Horizons
In our 2011 report, "Coordinating Impact Capital" interviewees from investment firms reported that they initially invested with a three-to-five year time horizon, but almost always experienced greatly extended holding periods for thier investments - up to double their expectations.
Roughly 75 percent of impact investors now target time horizons ranging from 5-to-10 years.
The extended holding period is a major concern for the impact community. Time is the enemy of market rate returns and expectations from sources of capital will not be met if they are at or near historic market levels. To gain investor confidence, market mechanisms and forms of investment that allow for predictable and consistent "round trips" of investment capital need to be constructed. To an investor, round trip connotes both investmnet and subsequent return of capital, hopefully with a profit.