Abstract
In recent times, investors have started to consider alternative sustainable investment strategies that mobilize financial and economic forces to produce positive social and environmental impact, whilst still generating a financial return. One such investment strategy relates to private equity impact investing which harnesses private funding to provide solution-orientated investment that intentionally generates social, environmental, and financial value. Thus, understanding the determinants that influence or drive private equity impact investing has become of great importance in today’s economic climate. Hence, this research study primarily endeavoured to identify and analyse the macroeconomic determinants of private equity impact investing within the South African market. This research study examined the determinants of twenty-four private equity impact investing funds for the period 2014 to 2019. The empirical model includes five macroeconomic variables which were found to be statistically significant in previous studies. These macroeconomic variables are economic activity, labour market rigidity, market capitalisation growth, real interest rate and annual inflation. The study employed a panel data analysis approach predicted on the pooled OLS model, fixed effects model and random effects model. As per the Hausman test, the fixed effects models were found to be the most appropriate models when conducting this research. Findings revealed that economic activity, market capitalisation growth, real interest rate and annual inflation were statistically significant and exhibited a positive relationship with private equity impact investing fundraising. On the other hand, labour market rigidity was shown to be statistically significant and displayed a negative relationship with private equity impact investing fundraising.