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Asia’s next gen HNWIs, UHNWIs gear portfolios towards impact investments
98% of participants in recent Lombard Odier study looking to increase allocation to impact investments
The Asset 16 Nov 2017

AN Impact Investment survey by Lombard Odier of next generation high net worth individuals (HNWIs) and ultra high net worth individuals (UHNWIs) in Asia found that almost all (98%) of those who participated were looking to increase their allocations to impact investments, with 3% of these seeking to make 100% of their portfolio impact-driven.

Impact investing continues to take root in the region as HNWIs and UHNWIs look to have a positive impact on the world around them amid fast-moving and challenging global circumstances.

The survey, which polled more than 110 next generation HNWI and UHNWI clients of partner banks associated with Lombard Odier from Asian markets, found that improved availability of good impact investing solutions with demonstrated performance was a major factor behind this shift (68%), alongside rising concerns about social and environmental challenges (52%).

“We have seen a shift in client interest driven in part by the next generation. During our most recent Next Generation Forum with young family business members from Asia, impact investing emerged as one of the most notable themes, with participants showing great willingness to gear their portfolios for impact for wide-ranging reasons largely driven by social-conscience,” says Vincent Magnenat, chief executive officer, Asia-Pacific at Lombard Odier.

These results point to a continuation of a trend identified last year in a Lombard Odier survey of HNWIs in Asia which found that almost every respondent (99.1%) agreed that social responsibility had become important in a post-COP21 (2015 Paris Climate Accord) world and, moreover, most (97.2%) were willing to increase their allocations to impact investing.

Despite the increase in willingness among the next generation HNWIs and UHNWIs to invest with impact, more than half (56%) of those surveyed were yet to make a single impact investment, and a further quarter (26%) of those surveyed were unfamiliar with the basics of Impact Investing.

“While we continue to see increasing awareness around impact investing in the region, the market remains relatively underdeveloped compared with some parts of the world. Even among a next generation audience we continue to see HNWIs and UHNWIs in Asia take a cautious approach to increasing allocations to impact investing strategies. However, we do not believe it will take long for the gap to narrow in Asia with improving availability of investment instruments driving this change,” adds Magnenat.

In this context a preferred asset class for impact investment is yet to clearly emerge, with next generation respondents citing venture capital (23%), tangible assets (21%), listed equities (14%) and bonds (13%) as ways they would be interested to add impact investment into their portfolios.

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