What prevents investors from committing to a fund? Lack of experience and track record, according to a survey of allocators by Impact Capital Managers.
“We’re looking for clarity, focus, and alignment between a team’s experience and their strategy. If that’s not there, we can’t get comfortable,” said Cynthia Muller of the W.K. Kellogg Foundation, a member of ICM’s Limited Partner Advisory Council.
Poor impact management and measurement practices or weak impact theses was the second most cited reason, followed closely by lack of confidence in the GP management team or concerns around governance and integrity.
“A misaligned or performative impact strategy is a red flag. We’re looking for managers who treat impact as integral — not a marketing line,” said Andrew Lee, who heads sustainable and impact Investing for UBS Global Wealth Management.
The findings are from ICM’s newly released Impact Allocator Perspectives 2025: Opportunities and Risks in Evolving Private Markets, which surveyed asset allocators about their concerns, strategies and deployment priorities for 2025. The 42 respondents hailed mainly from the US and included fund of funds, foundations and endowments, banks and financial institutions, single and multi-family offices and other investors.
Investment priorities
Climate was a top investment theme, with 25 mentions. Also ranking in the top six were real assets (14) and financial inclusion (13). Healthcare, workforce development and affordable housing each drew 10 responses.
“Allocators are prioritizing climate in 2025, but the recalibration away from over-allocated venture strategies is clear,” said Mark Berryman of Capricorn Investment Group, who leads ICM’s LP Advisory Council and coauthored the report.
“This signals a growing appetite for climate exposure through real assets, private credit, and other structures that better align with today’s market dynamics.”
LP concerns
Exits, liquidity constraints and regulatory uncertainty were the overriding concerns for respondents, both for their immediate portfolios as well as for deployments over the next 12-18 months. Liquidity issues were most likely to hamper investments by family offices, fund of funds, and foundations.
Almost a quarter of respondents also cited financial return potential as a potential brake on impact allocations over the next year and a half.
