Canada’s private impact investing market is coming of age: ISF/Rally Assets report

New research published today from the Institute for Sustainable Finance (ISF) and Rally Assets reveals Canada’s private impact investing market is coming of age. The research offers evidence of a maturation in the sector over the past five years, and a 2025 cumulative market size of $17.7 billion in target capital. The findings signal a shift from a niche segment to a more established and investable market for Canadian asset owners.

Key findings include:

• Annual product launches reached 55 in 2025 – a nearly seven-fold increase since 2021 - with first-time fund managers responsible for almost half of product launches in 2025.
• Annual target capital reached $4.2 B in 2025, a nearly nine-fold increase since 2021.
• Market growth has not been uniform over the years. The market would benefit from increased asset owner allocations, more innovative financing models, greater regional representation and more diverse areas of impact.

A unique joint practitioner-researcher response

The report, titled “The State of Private Impact Investing in Canada”, is a unique joint practitioner-researcher response to a call from the Canadian Impact Investing Working Group to dispel myths and misperceptions about impact investing and assess the current supply of impact investment products in Canada. It provides a robust, Canada focused, multi-year analysis of private impact investing, defined as investments that aim to generate positive environmental or social outcomes alongside financial returns.

The report leverages ISF’s research expertise and analytical rigour, alongside Rally Assets’ practitioner experience and access to a dataset of necessary breadth and depth to support a market-level view.  

From feelings to fact

Through data, the study challenges misperceptions that traditional investors often have about Canada’s impact investing market: The feeling that impact investing is an asset class rather than an investment approach, that there is a scarcity in investing opportunities, and that portfolio construction possibilities are limited.

“Evidence-based decision-making is at the heart of impact investing for practitioners like us, guiding portfolio construction and monitoring,” says Kelly Gauthier, President, Rally Assets. “With this report we brought that evidence lens to the wider impact investing market, in a way that we believe will be useful in helping to strengthen the market’s depth and long-term resilience.”

“For asset owners, asset managers and other community partners, understanding where capital is allocated, how strategies evolve, and where gaps remain are key to scaling the market effectively in the years ahead,” said ISF Director of Research Yrjö Koskinen. “We’re pleased this research helps to bring that deeper understanding.”  

“Canada has hit a defining moment for impact investing,” said Yingzhi Tang, Senior Research Associate at ISF. “By connecting institutional capital with high-impact investments, within blended and aggregated strategies, the next phase of growth could be substantial.”

The report reinforces that impact investing is not a standalone asset class, but an approach applied across instruments such as venture capital, private equity, real assets, and private debt.

The research found that while the market is growing and diversifying, the changes have not been even: venture capital dominates, market activity is focused on Canada’s major population centres, and products are focused on just a few key impact areas. More work, and investment, is needed to grow the market to ensure greater benefit to Canada’s communities and ecosystems. 

Download the full report, “The State of Private Impact Investing in Canada,” to explore the data, trends, and opportunities shaping the future of impact investing in Canada.