Investing in social equity through private markets

Creating decent jobs, expanding access to healthcare, improving education and reducing inequality all require investment on a scale that governments and charities can’t meet alone.

According to UN Trade and Development (UNCTAD), achieving social protection and decent work goals across just 48 developing economies would require around US$5.4 trillion every year.1 The world’s biggest social challenges aren’t short of ideas; they’re short of capital.

For investors, that raises an important question: how can capital help close the gaps in social equity while still seeking long-term returns?

Private markets are becoming an increasingly important part of the answer. While public markets remain essential to financing the global economy, many of the businesses tackling complex social challenges are still privately owned, locally rooted and often too early-stage or specialised to be publicly listed.

The Global Impact Investing Network (GIIN) estimates that around 73% of impact investing assets are now allocated to private markets.2 Much of this capital supports sectors tackling social equity, including financial services, healthcare, and education, with more than half directed towards improving outcomes for low-income communities.

Backing local businesses that strengthen communities

Small and medium-sized enterprises (SMEs) are the backbone of many emerging economies, yet access to finance remains one of their greatest barriers to growth.

Traditional lenders often require lengthy trading histories or significant collateral, making it difficult for smaller businesses to borrow. This challenge is particularly acute for women entrepreneurs. The SME Finance Forum estimates that women-owned businesses account for around 34% of the US$1.9 trillion finance gap for small businesses in emerging markets.3

Private credit and specialist financial technology (fintech) businesses are helping to change this. By using digital transaction data rather than relying solely on traditional credit scores, lenders can assess businesses based on their cash flow and day-to-day performance. This opens the door to finance for entrepreneurs who may previously have been overlooked.

The impact extends well beyond the individual business. Access to capital enables companies to hire staff, invest in equipment, build local supply chains and create opportunities within their communities. Over time, this contributes to broader economic resilience and greater financial inclusion.

For some impact investors, these types of businesses may offer exposure to sustainable economic development, alongside the potential for growth, subject to the risks and suitability considerations associated with private market investments.

Financing the services people rely on every day

Social equity is about more than income. It’s also about access to the services that allow people and communities to thrive.

Across private markets, investors are supporting businesses delivering practical solutions in healthcare, education, housing and clean energy.

In healthcare, this includes early-stage companies developing treatments for historically underfunded areas such as women’s health, as well as technologies designed to tackle antimicrobial resistance before outbreaks spread.

In education, innovative businesses are helping teachers identify pupils who need additional support through AI-powered learning tools, while specialist finance providers are enabling low-cost schools in India to improve classrooms and expand access to quality education.

Housing is another area where private investment can have a meaningful role. Specialist housing providers are working alongside charities to deliver safe accommodation and tailored support for people experiencing homelessness or women escaping domestic abuse. Stable, government-backed rental income can also provide a different return profile from traditional property investments.

Elsewhere, private debt is helping expand access to affordable clean energy across Africa and Asia through off-grid solar systems for households and small businesses, while investments in sustainable agriculture are supporting local food processing industries that create jobs closer to where crops are grown.

These examples demonstrate how private capital can help finance essential infrastructure that improves everyday lives while building stronger local economies.

Supporting fairer outcomes through innovative investments

Some opportunities in private markets are emerging through investment strategies designed specifically to address entrenched social challenges.

One example is impact litigation finance, which enables individuals and communities to pursue legal claims that might otherwise be unaffordable. This can help Indigenous communities seek redress for historic injustices or support cases involving human rights abuses and environmental damage.

Another growing area is social outcomes contracts. Rather than funding services based solely on activity, these models link investment to measurable improvements in people’s lives. Programmes may focus on reducing homelessness, supporting families whose children are at risk of entering care or helping people with long-term health conditions improve their wellbeing through preventative interventions.

These approaches encourage innovation while directing resources towards programmes that deliver meaningful and lasting outcomes.

From private capital to lasting social value

Investing with a social lens requires careful judgement. Businesses serving vulnerable communities can create significant positive impact, but they also require rigorous assessment to understand potential risks and avoid unintended consequences. Strong governance, transparency and impact measurement remain essential.

Private market investments also differ from listed investments. They are typically longer term, less liquid and can involve different risk and return characteristics. Some opportunities may target lower financial returns where the social impact is particularly compelling, while others seek market-rate returns alongside measurable positive outcomes. These features mean they are not generally suitable for retail investors and may only be appropriate for clients who meet relevant eligibility, categorisation and suitability requirements. Within a diversified portfolio, these investments can complement one another by providing different sources of return and resilience.

Ultimately, investing in social equity is about recognising that long-term prosperity depends on more than economic growth alone. Stronger communities, wider access to opportunity and more resilient local economies create value that benefits society as a whole.

Private markets give investors access to businesses developing practical solutions to some of the world’s most pressing social issues. When capital is directed thoughtfully, it can help create opportunities that extend well beyond financial returns.

Global Impact Investment Network. (2025). State of the Market.

SME Finance Forum. (March 2025). MSME Finance Gap.

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