The Brief

The Brief: The real returns of impact-first fund managers

ImpactAlpha · January 20, 2026

Greetings Agents of Impact!

In today’s Brief:

  • Market perspectives from impact-first fund managers
  • Blue Earth’s secondaries strategy
  • Low-cost prosthetics for children in conflict zones

These fund managers are finding novel solutions by seeking impact first. What does it take to be a top-quintile fund manager delivering the highest possible risk-adjusted… impact? A growing cohort of impact investing firms are distinguishing themselves by starting with the problem to be solved, tackling market failures and structuring financing around enterprises’ needs. Sometimes, such solutions need to be subsidized. Sometimes, they’ll go to the moon. Putting impact first “allows us to offer capital on terms that enable our investees to scale on mission, rather than drift up-market,” says Tara Murphy Forde of Global Partnerships, which has deployed more than $875 million to roughly 200 social enterprises since 2005. “It means we can center the needs of clients by addressing the multi-dimensional nature of poverty and how people experience it in their lives.” Murphy Forde will join other impact-first fund managers on this week’s Agents of Impact Call (RSVP here). Ahead of The Call, ImpactAlpha asked guests to share market perspectives. “Working capital is the new equity,” says Caroline Bressan of Open Road Impact. “So many impact companies will never have their ‘unicorn’ moment, but that doesn’t mean they aren’t providing real value to the people and communities they serve.” 

  • True costs of impact. For years, impact investors have been asked to benchmark themselves against the vague and shifting notion of “risk-adjusted, market-rates” of return. Legacy venture and private equity fund managers may promise sky-high returns while instead delivering mediocre results. For the first half of 2025, US private equity funds overall earned 3.9%, according to Cambridge Associates. Venture capital firms earned 6.4%. As impact fund managers face down a fourth straight year of challenging fundraising, investors’ inflated expectations have become a major obstacle. Impact investments that serve lower income communities, operate in thin or emerging markets, or absorb risks others avoid, are often expected to internalize social and environmental cost while competing against benchmarks built on their exclusion. In “The true cost of impact-first investing,” released last year, Global Partnerships, Open Road Impact, Acumen, Kiva, the Miller Center for Global Impact and four other impact-first fund managers found that impact-first funds incur higher costs per dollar deployed, driven by things like smaller ticket sizes and hands-on support. Such costs “reflect the price of inclusion,” the report said.
     
  • Fit for purpose. Rhia Capital’s first two funds invest commercially in businesses in sexual, reproductive and maternal health. “For our next fund vehicle, we’re exploring catalytic capital – intentionally designed to accept lower returns to achieve transformative outcomes,” said Rhia’s Erika Seth-Davies. Acre Impact Capital provides the layer of commercial capital required to unlock financing from export credit agencies for sustainable infrastructure in Africa. “They provide the concessional element of the debt package, while we can invest on market terms,” says the Acre’s Hussein Sefian. “This allows us to attract commercial investors as well as impact-first investors.” Impact-first managers are making the case to family offices, philanthropies and other investors with flexible return expectations from their stakeholders (see, “The surprising resurgence of impact-first investing”). “We feel that the investor-side should be doing the brain damage to craft an innovative financial solution for the impact model, rather than asking founders to pretzel themselves to accommodate the risk profile, vehicle and portfolio construction we prefer,” says Daniel Tellalian of Echoing Green’s Signal Fund.
  • Founders’ point of view. One impact investor told Funding U’s Jeannie Tarkenton that she led with “too much mission and not returns.” Another faulted her for failing to “clearly articulate the social impact priority upfront.” In a guest post, Tarkenton says she stopped trying to fit investor expectations and instead provided “radical clarity” about what she was building. For Funding U, a fintech company serving students locked out of traditional credit, that means “slower, steadier growth and a business model where profitability depends on serving the customer well.” On LinkedIn, in The Chronicle of Philanthropy and on ImpactAlpha, impact practitioners have built upon an op-ed by Kevin Starr of Mulago Foundation that argued “there is no such thing as impact investing.” Tarkenton’s suggestion: Sidestep the impact-versus-returns argument and focus on clear-eyed alignment between funder and founder. Read her full post.
     
  • Keep reading, “These fund managers are finding novel solutions by seeking impact first,” by David Bank, Dennis Price and Isaac Silk. Join this week’s Agents of Impact Call, Wednesday, Jan. 21, at 10am PT / 1pm ET / 6pm London. RSVP today.

Dealflow: Impact Exits

Blue Earth Capital raises more than $100 million for its impact secondaries strategy. Lack of liquidity and exits is holding back new capital commitments to impact fund managers. Last year was one of the worst for impact fundraising, especially for equity funds. Switzerland-based Blue Earth Capital for the past five years has been working to seed a market for impact secondaries. The firm has raised just over $100 million toward a $300 million target for its first dedicated secondaries vehicle. “To continue to prove that we can generate impact and financial returns, we need liquidity to accelerate. Secondaries are a tool to do that,” Blue Earth’s Nicolas Muller told ImpactAlpha (see related, “Impact LPs and GPs search for solutions in a tough year to raise and deploy capital“). Blue Earth has backing from French development finance institution Proparco, the Ursimone Wietlisbach Foundation, and German family office Stella. The firm will commit 30% of the capital to emerging market opportunities. Proparco provided catalytic first-loss capital for emerging market deals to buffer other investors’ risk perceptions.

  • LP/GP. Blue Earth acquires both GPs’ stakes in companies, and LPs’ stakes in impact funds. It began doing secondary deals in 2021 through its multi-asset impact fund, which included the acquisition of three impact fund investments and a stake in Nigerian fintech company Moniepoint from British International Investment (see, “British International Investment sells stakes to seed impact secondaries market”). It launched the dedicated secondaries strategy at the end of 2024 and has since closed two deals: a stake in Spanish organic waste treatment company Gestcompost, which it acquired from Suma Capital; and a portfolio of four emerging market impact funds, which were sold by an undisclosed investor.
  • Sustaining impact. Secondary funds are an established strategy in traditional private equity, but they’re new to impact investing. A recent impact market report tallied just four dedicated impact secondaries funds. US-based North Sky raised $250 million in December for its fifth secondaries fund. “Impact is a nascent asset class. There is pressure on fund managers to generate liquidity early on,” said Muller. Dedicated impact secondaries funds are important for sustaining and deepening the impact seeded by early investors. “One of the impact factors we look at is what a seller is going to do with the proceeds,” said Muller. “Is the seller recycling the proceeds into additional impact investments?”
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Dealflow overflow. Investment news crossing our desks:

  • The Private Infrastructure Development Group provided $ 3.3 million in equity and $500,000 in grant funding for Kenya-based Sanivation, which converts human waste into fuel “briquettes” that can be used instead of charcoal. (PIDG)
  • Novastar Ventures, the Energy Entrepreneurs Growth Fund and other investors backed Nigeria-based MAX, an EV provider and financing company. (Empower Africa) 
  • CrossBoundary Group acquired four mini-grids developed by Madagascar-based renewable energy group ANKA. (CrossBoundary)

Agents of Impact: Follow the Talent

Mastercard Foundation is on the hunt for an Africa-based consultant for its Innovation Labs…  Conservation International is looking for a nature markets director in Kenya or South Africa…  Netherlands-based IDH seeks consultants to undertake investment readiness assessments on agribusinesses. 

Brazil-based BTG Pactual is hiring a Carbon Project Manager for its team in Chicago… US-based Eurasia Group is hiring a climate-transition analyst in Mexico City or Nairobi… UK-based C40 Cities seeks an Africa-focused senior manager for its inclusive climate action program… BioLite is recruiting an Africa-based carbon project manager. 

The Common Fund for Commodities is accepting applications to finance projects that improve smallholder farmers’ livelihoods through regenerative agriculture, financing and digitization… 60 Decibels is hosting a webinar with British International Investment on Wednesday, Jan. 28 60db Signal, an impact data platform for investment decision-making… The Stanford GSB Impact Fund is on the hunt for investment opportunities in education, financial services, healthcare, justice, urban development and climate. 

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Jan. 20, 2026