In just a few years, impact investing has gone from a niche strategy to an asset class recognized by institutions, pension funds, and family offices across Europe. But it is still widely misunderstood: many investors confuse it with ESG, others assume it means giving up returns, and very few know how impact is measured in practice.
In this article, we explain exactly what impact investing is, how it differs from ESG, what returns it generates in Spain, how non-financial KPIs are structured, and which trends are shaping the industry — with real data and quotes from professionals who have been working in this space for years.
What is impact investing?
Impact investing (inversión de impacto in Spanish) is a strategy that seeks to maximize three criteria at the same time: risk, return, and measurable social or environmental impact. Unlike philanthropy, it does not give up financial returns. And unlike traditional investing, it does not accept that capital should serve only to generate more capital.
The term was coined by the Rockefeller Foundation in 2007, although the practice had been developing earlier in the United States and the United Kingdom. In Spain, the first asset manager dedicated exclusively to impact was Creas, founded in 2008 as a foundation and established as an asset manager with the launch of its first institutional fund in 2018.
The requirement that sets impact investing apart from any other strategy is that the impact must be intrinsically linked to the business model: the more the product or service sells, the more impact it generates. A company whose profitability and impact grow together is a candidate; a company that simply applies good operating practices is not.
The continuum: where each strategy fits
To position impact investing against other types of strategy, it helps to picture it as a point on a continuum that runs from pure philanthropy to unrestricted traditional investing.
“I don't want to give up one in favor of the other. What I do is, just as has always been done with risk and return, I add the impact dimension and keep measuring how to maximize all three criteria.” — Olivia Mosay, Partner at Creas
The difference between ESG and impact investing
This is the most common confusion in the industry. ESG is the how; impact is the what.
A company can apply flawless ESG criteria — diversity policies, work-life balance, transparency, energy efficiency — and still sell a neutral or even problematic product. An impact company, on the other hand, sells a product or service that in itself generates the social or environmental good being pursued. The impact is inside the business, not in how it operates.
Is impact investing profitable?
One of the biggest barriers to entry has been the still widespread belief that impact investing means accepting below-market returns. Industry data shows that this perception is wrong.
The strategy falls into three ranges depending on the fund's profile:
- Impact-first funds: they prioritize impact and accept concessionary returns (around 5% net)
- Finance-first or market-rate funds: they seek returns comparable to traditional investing (2x–3x net)
- Hybrid / niche funds: they combine both approaches depending on the vehicle
A concrete example from the second group: the second fund from Creas, closed in 2026 at €65 million against an initial target of €70 million, operates with a target of 2.5x net. In other words, a market-rate return.
“I'm at market-rate returns. That doesn't mean everyone in impact is going for that return; there are other funds that go for more concessionary returns. But depending on your strategy, you play with the three criteria and decide which one you lean toward most.” — Olivia Mosay, Partner at Creas
The typical mid-market strategy in Spain combines Series A, Series B, and early growth rounds (companies with €0–5 million in revenue), with deal sizes ranging from €1 million to €8 million depending on the stage.
How impact is measured
The big operational difference between an impact fund and a traditional fund lies in measurement. In the classic financial world, success is measured with two numbers: IRR and multiple. In impact, three additional dimensions come into play:
- Scale — how many people, hectares, or tons are affected
- Depth — how much each individual case is transformed
- Duration — whether the effect lasts in the short, medium, or long term
Each investment includes specific KPIs that are worked out company by company and built into the objectives of the management team, not just the founder. Some real examples from the industry:
- In a deal involving route optimization software for public transportation: empty kilometers avoided (environmental) + improved working conditions for staff (social)
- In a deal involving adolescent mental health: number of patients treated (scale), academic success rate (depth), affordability (reach)
The most interesting mechanism for investors is how these KPIs are tied to the fund's carry. In Creas' case, the model is strict:
“If we don't reach 80% compliance with the impact KPIs, we get no carry, zero. Even if we've made a fortune in returns, zero. Between 60% and 80% it's proportional, and above 80% it does move on to the financial side.” — Olivia Mosay, Partner at Creas
In other words, even if the fund achieves excellent returns, if it misses its impact targets, the managers don't get paid. That level of alignment between LPs and GPs barely exists in traditional private equity.
The “impact alpha”: a competitive edge in sourcing
Beyond the theory, impact funds argue that they have a real advantage in deal origination. The reason is simple: founders who have spent years building a purpose-driven business open doors to aligned investors that they don't open to traditional funds.
“It's a completely different thing to ask for a meeting with someone who has spent 20 years pouring their heart into their company when you're an impact fund, knowing you'll be aligned with their mission and that you won't make them do things they don't want to do.”
This dynamic leads to deals that a traditional fund would struggle to win without paying significant premiums. It is one of the strongest arguments that an impact strategy can generate real alpha in a portfolio, not just fulfill a purpose-driven mandate.
At the company level, data from the COVID period also points to greater resilience: founders with a strong sense of purpose fought harder for their businesses when times got tough, while many traditional startups failed without that motivating force.
Industry trends in Spain
Three areas currently attract much of the attention of Spanish impact managers:
Adolescent mental health. Suicide is the leading cause of death among adolescents in developed countries. The supply of specialized social and healthcare centers in Spain is very limited and concentrated in large cities. There is room for operators that combine therapeutic treatment with continued education, a model that barely exists in either the public or the private sector.
Affordable housing for the working class. The segment of people who work but struggle to make ends meet is extremely large and faces serious problems accessing housing. There is support for the most vulnerable segments and market solutions for the wealthiest, but the middle ground lacks suitable investment vehicles.
Circular economy and refurbishment. Companies that extend the life cycle of electronics, textiles, and consumer goods. It is one of the few segments where environmental impact is measurable and comparable euro for euro across deals, which makes investment decisions easier.
How to start impact investing
For investors who want to explore the strategy, there are three main routes:
- Through specialized funds — the most accessible option for HNWIs and family offices. It allows diversification across strategies, sectors, and time horizons.
- Direct co-investment with a fund — an increasingly common approach among sophisticated LPs who want greater exposure to specific deals within the manager's deal flow.
- Direct investment in companies — viable for investors with their own analysis and due diligence capabilities, but it requires building your own pipeline.
Whichever route you choose, the practical advice most often repeated by experienced managers is to focus on the people: impact investing requires executing complex plans where purpose alignment between investor and manager (or between fund and founder) is decisive. If you have doubts about the other party's real intentions, that instinct is usually right.
Go deeper with those who do it
In episode 2x08 of Rainmaker — Deale's podcast on M&A in Spain — we talk in depth with Olivia Mosay, Partner at Creas, about everything covered in this article: the structure of their second fund, real investment cases (Desconecta, Goal Systems), how they manage the dual focus on impact and returns in their portfolio, and her advice for investors who want to get into this space.
