Family offices 'fastest growing' group in Asia impact investor network
Family offices in Asia are very eager to engage in impact investing and philanthropy as well as seek co-investors for such initiatives, the top executive of a network of impact investors said.
“Family offices are our largest growing membership segment,” Naina Subberwal Batra, CEO of AVPN, told AsianInvestor.
AVPN, earlier known as Asian Venture Philanthropy Network, is a investor network that focuses on facilitating the flow of capital towards impact intiatives in Asia.
Investors provide funds across different capital stacks, ranging from grants and debts to equity across multiple investments within their own portfolio, to achieve deeper impact.
An impact investing strategy broadly targets companies or industries that produce social or environmental benefits alongside a financial return.
RISING INTEREST
AVPN
Members join the organisation at various parts of their sustainability/venture philanthropy journey, she said, noting strong interest from family offices in Singapore and Hong Kong, with India following close behind.
“India has had a thriving impact investing eco-system over the past few years and Indonesia and Vietnam have also become targets of investors seeking to find impact deals. Now the interest is growing everywhere,” Batra said.
Apart from family offices, AVPN members include corporates and financial institutions, impact funds, private equity and venture capital entities among other organisations.
As family offices sprout across the region, and the second and third generations of wealthy families take over, priorities are shifting.
“As wealth is transferred to the younger generation, most of whom studied overseas (outside Asia), they are very clear that they want to follow a different path from their parents’ generation,” said Batra.
While setting up family offices, separate from their businesses, a lot of families have moved from brick-and-mortar to more liquid assets.
"That makes investments a big focus of their operations,” said Batra.
There’s no surprise about what investors want to invest in: “Everyone is keen on technology - whether its financial tech, health tech or education technology,” said Batra.
The Singapore-based executive noted that when family offices join the network, one of their key goals is to meet other like-minded peers and co-investors. “A lot of them want to come in and invest with a peer group.”
“They might also want to participate in pooled philanthropic funds, which offers money on very flexible terms. It encourages more trust among them and they are inspired by each other,” she added.
Members also join to gain new insights and for knowledge sharing. “We run training programs on topics such as investing with a gender lens, so that is also something members find useful,” Batra said.
SUSTAINABILITY GAINS
Institutional investors and family offices in the region are making more concerted efforts to invest sustainably, even as the term ESG has become more politicised in the US.
“Despite all the greenwashing noise, ESG in Asia is on the rise,” Batra noted.
“It has taken a long time for Asia to join the ESG bandwagon and it’s really because of Japan. Government Pension Investment Fund, the largest pension fund in the world, decided it wanted to invest with an ESG lens that led to Asia contributing towards more ESG investments,” noted Batra.
Over the past few years, regulators in countries like Malaysia and Singapore have also encouraged a greater focus on ESG investing.
“Having investable opportunities is important because earlier, we didn’t have very many sustainable investments that could be rated on ESG metrics,” she said.
AVPN recently announced the launch of ImpactCollab, an outcomes-based investing system.
It is geared for financial institutions, family offices, ultra-high net worth individuals and impact organisations across Asia to facilitate philanthropic giving and impact investing and scale up capital deployment.