Long-run Returns to Impact Investing in Emerging Markets and Developing Economies

This paper provides the first comprehensive evidence on the long-run returns to private equity in emerging and frontier markets. Utilizing cash flow data from every equity investment made by the International Finance Corporation across 130 countries over 58 years, the study analyses the relationship between realised returns and macroeconomic conditions. It finds that returns are lower when economies relax capital controls and deepen their banking sectors, and improve with stronger real GDP growth and reductions in sovereign risk.