Insight into the Social Impact Bond market: an analysis of investors

In the last five years, the public and private sectors have shown considerable interest in Social Impact Bonds (SIBs), a financial innovation that enables the mobilization of private financing for public sector programmes. A SIB involves a contractual agreement for the provision of public services by a private sector consortium, ‘optimal’ risk sharing between the public sector and the private sector, and innovative design and delivery of public services by the private sector. A large number of actors – such as governments, social organizations, impact investment intermediaries, and banks – have contributed to the development of the global impact bond market over the last six years. Recent research efforts have explored the topic of SIBs from different theoretical perspectives. However, empirical studies are still lacking, and their limits, potential and effectiveness need to be explored. Many attempts have been made to map the SIB market. Moving from the widely varying results in both number and execution of SIBs around the world, this work aims to provide an updated analytical map of this promising field of activity worldwide, with a focus on the investors consciously pursuing a blend of economic, social and/or environmental value. Finally, this study identifies the issues investors face and suggests areas for future research in this field. These preliminary results are encouraging and offer several starting points for future works.