An increasing focus on impact investing is being identified by wealth managers, whose family clients seek to align private capital with measurable social progress.
Wealth managers are seeing a growing demand for strategies that balance financial returns with social outcomes, often leveraging data-driven insights to guide investment decisions.
Four critical areas — health, human rights, sustainability and gender equity — where private capital can play a pivotal role in driving meaningful change, are identified by the 2025 AlTi Global Social Progress Index.
Produced by New York-based wealth firm AlTi Tiedemann Global, which manages $77bn in client assets, the index assesses 170 countries across key indicators, including health, safety, education, infrastructure and human rights.
Despite a broader economic recovery, the index highlights a stagnation in global social progress since 2020.
Analysis of data around these priority areas is currently missing from many decisions made by impact investors, argues Michael Tiedemann, chief executive officer of AlTi Tiedemann Global. “Understanding structurally why there is a problem, and the origin of that, is crucial before finding solutions,” he adds.
The role of impact investing is growing, believes Mr Tiedemann, with “some of the most discerning and dynamic capital holders in the world” now moving to this type of investment strategy. “Collectively, private capital has the power to make a tangible difference in addressing the world’s most pressing problems,” he stresses.
Social contraction
According to the research, 43 per cent of countries experienced little or no social progress in the past year, and 15 per cent faced significant declines despite global economic growth.
While economic resources offer potential for social progress, countries differ widely in their ability to translate GDP into social outcomes. For instance, despite similar GDP per capita, Denmark outperforms the US by 10 points in social progress. Meanwhile, the US shows comparable social progress to Latvia, despite the latter's GDP per capita being half that of the US.
Private capital is expected to play a major role in paving the way for change. “It’s about the combination of different forms of assets... government, private capital, and philanthropic sectors working together,” says Michael Green, chief executive officer of the Social Progress Imperative, a non-profit organisation focused on advancing social progress globally.
“One of the biggest improvements in social progress for the world in the last 15 years has been the growth of the internet and mobile telephony. Those are hugely important, and that's got nothing to do with governments. That's been about private businesses,” he explains.
Going nowhere
There is significant potential for investment in sectors that can drive meaningful change, particularly in health. Mr Green points to water and sanitation as “fantastic investments with huge positive externalities”, noting substantial progress in regions like sub-Saharan Africa and India over the past 10 to 15 years.
“People too often give into pessimism and assume things aren't getting better," he says, emphasising that expansion of modern sanitation in these regions tells a clear success story.
Technology is set to revolutionise healthcare, he believes. “AI has huge potential to deliver healthcare much more efficiently and effectively," especially as aging populations and more complex health needs demand innovative solutions.
Private numbers
Revenues from private markets are expected to exceed those generated by traditional investment strategies by 2027, according to Morningstar’s European Asset Manager Pulse.
Private equity now represents 39 per cent of private markets, with consolidation among key players boosting scalability and unlocking new opportunities. Private credit is gaining momentum as stricter banking regulations constrain traditional lending, driving demand for alternative financing solutions.
Real estate, infrastructure and renewable energy investments are also thriving, underpinned by sustainability efforts, digital transformation, and rising demand for data centres. The secondary market is also expanding, enhancing liquidity and efficiency by facilitating more active trading of private assets.
The development of ‘evergreen’ structures — essentially hybrids between open and closed ended funds, allowing their managers to continue raising funds through their lifecycle — opens up a much wider client base of private investors, says Johann Scholtz, senior equity analyst at rating agency Morningstar.
In the past, impact funds were the preserve of large-scale family offices and institutional investors, but the availability of new vehicles has significantly broadened the appeal of these strategies.
“In infrastructure and real estate, you have much longer duration assets,” he says. “It's a yield investment, and there are a lot of opportunities for private banks to structure vehicles that enable greater access for clients.”
