Asia is producing more ultra-high net worth individuals than any other region in the world, according to one report. Indeed, Hong Kong has overtaken New York to become the world’s largest ultra-high net worth city, reveals the sixth edition of the World Ultra Wealth Report. Half of the top ten fastest growing ultra-high net worth countries in the past five years are in Asia.
Many of the newly minted billionaires enjoyed the accelerated expansion of economies, the strong performance of capital markets and the return of IPOs, which especially boosted the wealth for the founders of Chinese technology companies that launched public offerings on the US and Hong Kong markets. The continued growth of the China market, deregulation in India and even expansion of smaller economies such as Vietnam all add to the wealth momentum in this region.
Their rise is coming at a time as the traditional and established wealth in Asia is undergoing a transition from the first to the next generation. This confluence of events in turn is spurring a rethink of how their vast wealth are to be reinvested including the growing interest in impact investing. The view of the new class of ultra-high net worth is no longer simply investing in the next real estate or private equity opportunity, some now want to see that the investment contributes and generates a positive social and environmental impact in addition to generating a financial return.
A recent report by the Global Impact Investing Network notes that the Asia-Pacific has been the fastest growing impact investing market globally over the past five years. But there are a number of obstacles facing increased activity by ultra-high net worth into impact investing. Among them include the lack of organized vehicles where funds can be deployed as well as issues of corporate governance.
There is also a growing need for education especially in dispelling the notion that impact investing is synonymous to philanthropy. Indeed, a number of successful social enterprise undertakings incorporate the adoption of modern technology breaking away from traditional business models and enabling them to achieve consistent double-digit returns.
- How are ultra-high net worth approaching impact investing?
- What is driving the interest?
- What are the challenges faced in increasing interest in impact investing?
- What are the success stories?
- What metrics are used to measure impact investing apart from achieving a financial return?
- Where are some of these opportunities located?
- What role can the private banks play?