Asian HNWIs and UHNWIs seek out impact investing: Lombard Odier

Asia-based high-net-worth- and ultra-high-net-worth- individual  investors are seeking to allocate more money to impact investing, according to a survey by Lombard Odier.

The survey, which polled more than 100 of Lombard Odier’s HNWI and UHNWI clients in Asian markets, including Hong Kong, Japan, Thailand and the Philippines, found that almost every respondent (99.1%) agreed that social responsibility has become important in a [post-2015 Climate Change Conference] world and, moreover, most – or 97.2% – are willing to increase their allocations to impact investing.

The survey was conducted in Hong Kong at the end of October, and the 111 respondents were generally found to support what Lombard Odier believes is a growing sentiment towards impact investing, which comes amid global efforts to address the causes and impact of climate change on the global stage.

‘Shift from traditional investments’

When reallocating wealth to impact or SRI investment, the majority of respondents (60.2%) said they would shift money from traditional investments (equities and fixed income), while almost  a quarter, or 23.1%, said they’d prefer to reallocate money from  charitable donations.

One quarter (25.2%) of respondents also believe that impact investing allowed them to pursue financial and social impact returns, the survey found.

Despite the interest in impact investing, most respondents, or around 90%, said they would prefer to allocate less than 50% of their overall wealth to impact investing, while nearly half of the respondents (49.1%) said they would allocate less than 15% of their wealth into the asset class.

Impact investing

Vincent Duhamel, head of Asia, at Lombard Odier, said: “The survey highlights Asian HNWIs and UHNWIs’ increasing awareness of the importance of impact investing, driven by societal and regulatory trends, but also their cautious approach to incorporating the strategy in their investments.

“It is encouraging that the topic has become a central theme among investors, and this reflects many of the discussions we have with our clients.”

Duhamel points that with Asia’s dramatic expansion over the three last decades, the region has witnessed huge problems associated with water, air and the impact of climate change, as recognised by the Chinese authorities and other governments in the region.

Cross generational concern

“These issues have been of great concern not only amongst the older generation, but also the youth of today, who have been urging a rethink of the related issues,” he added.  “Two in five (41.4%) of respondents felt Asia’s efforts to tackle climate change in recent years had improved moderately and significantly.

“For Lombard Odier as a wealth manager for more than 220 years, with a focus of wealth preservation for the next generation, the notion of sustainability is at the heart of what we do. We hope to see this positive momentum continue with increasing commitments from the world’s leaders to address the challenges and provide a sustainable environment that encourages all forms of SRI,” Duhamel added.

Lombard Odier had around US$224bn of total client assets, as per end-December 2015, with a focus on discretionary portfolio management.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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