The impact investment narrative and perceptions held by Swedish investment managers

This Master thesis describes the ways in which narratives and perceptions of impact investment can affect investor behaviour. This thesis argues that the narratives and perceptions of impact investment are formed via the seen components of what makes up impact investment as an asset class, as well as the heuristics and biases that affect the investment managers. In 2020 Sweden was ranked as the most sustainable country. This, paired with current agendas focused on sustainability within the private insurance sector and stakeholder demand are why this thesis chooses to focus on the perceptions and narratives held by some of Swedens private insurance investment managers telling the narrative. To better understand the ways narrative and perceptions are constructed, this thesis discusses the existing literature describing returns on impact investment, effectiveness in achieving social and environmental impacts, and barriers to entry of impact investment. Then it will provide a brief overview of the study of Behavioural Finance and introduce heuristics, and perception. The thesis will also provide thematic narrative analysis of interviews given by a few of Swedens’ investment managers responsible for investing on behalf of private insurance companies. Through this analysis four themes within the coding of the informants’ responses were identified. Through further analysis this thesis found that two key investor types were identified. The two investor types possess their own heuristics that could cause either to perceive and construct narratives surrounding impact investment differently. An additional finding of this thesis was the unclear usage of the term impact investment. There was an observed blending of terminology that was explained to be caused by a lack of measurement metrics as well as a lack of generally accepted definition for impact investment which could cause misunderstanding or misusage of the term impact investment colloquially