Friday, August 14, 2020

‘Impact investing’ rising in region

Jun 24. 2019
Joost Bilkes, head of the Asia Pacific region, for the impact advisory and finance department at Credit Suisse
Joost Bilkes, head of the Asia Pacific region, for the impact advisory and finance department at Credit Suisse
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“INVESTMENT in sustainable assets, also known as ‘impact investing’, will be a rising trend in the Asia Pacific region in the next decade,” said Joost Bilkes, head of the Asia Pacific region, for the impact advisory and finance department at Credit Suisse.

Credit Suisse currently manages over US$25 billion (Bt773 billion) worth of sustainable assets for their clients globally, with small fraction valued at $1.5 billion (Bt46.38 billion) located in Asia. This leaves a huge potential for growth in this investment niche for the Asia Pacific region, he said.

With environmental concerns are growing, investors are seeking more sustainable assets that at the same time, do not compromise on their returns. Bilkes aims to capture this trend and offer investment solutions to his clients at Credit Suisse through impact investing. 

Globally, the value of assets under management is now around $88 trillion (Bt2,721,000 trillion), Bilkes said. However, there is an under-investment in sustainable assets, with impact investing only valued at around half a trillion, he said.

Over 1,340 organisations currently manage $502 billion (Bt15.52 trillion) in assets from impact investment worldwide, according to the report, “Sizing the Impact Investing Market”, published by the Global Impact Investing Network (GIIN).

The US and Canada make up 58 per cent of the total impact investing assets in the report, followed by western, northern and southern Europe at 21 per cent. Meanwhile, East Asia only account for 2 per cent of worldwide total impact investing assets. 

In a separate GIIN survey on the investment returns of impact investing, the majority of respondents reported that their portfolio performance overwhelmingly meets or exceeds investor expectations for social and environmental impact as well as financial return, in investments spanning from emerging markets to developed markets. 

The survey asked 216 impact investors worldwide about their impact investing assets, with 15 per cent reporting that their investments were outperforming, 82 per cent were in line and 3 per cent were underperforming. Meanwhile, in a survey asking 218 regular financial investors about their assets, 15 per cent reported that their investments were outperforming, 76 per cent were in line and up to 9 per cent underperforming.

In The Asia Pacific region in particular, the private banks are seeing the transition of wealth from the older generation to the newer generation, many of whom have been educated in Western countries, Bilkes noted.

“Newer-generation investors are becoming more interested in investment opportunities in sustainable assets. It has always been our priority to align the interest of our clients with their portfolio,” he said.

Impact investing activities at Credit Suisse, Bilkes said, include investments in small and medium-sized businesses with a social or environmental mission, and the development of financial products such as those designed to support smallholder farmers and high-potential students in developing countries.


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