The term impact investing may have been coined in the West. The practice’s future is being shaped in the East.
From Singapore to South Korea, Japan to Hong Kong, investors in the network of Asia-Pacific markets are defining Asia’s distinctive edge in the global impact investment ecosystem: patient capital, intergenerational stewardship and disciplined innovation.
Giving the movement momentum is a rising, intergenerational “now generation” steering the region’s innovative operating businesses and investment portfolios toward sustainability and social impact.“ There’s this undercurrent of energy and willingness to try and come together,” Katy Yung, who leads the Hong Hong-based Sustainable Finance Initiative, tells ImpactAlpha’s Dennis Price on the latest Agents of Impact podcast. “The reality is it has to be an intergenerational effort.”
SFi’s Impact Summit convenes next week in Hong Kong as part of a week-long series of events bringing together more than 300 leading family offices, asset owners and private investors from Hong Kong, across Asia Pacific and beyond.
In town for the summit: Impact chief investment officers Hareesh Nair of Tsao Pao Chee Group and Noelle Laing of Builders Vision; bankers Tom Road of Barclays Private Bank and Marie-Laure Schaufelberger of Pictet; Rocky Tung of Financial Services Development Council and Ivan Chew of Brightlight; and philanthropic leaders Chii-Fen Hiu of Temasek Trust and Motoi Kawabata and Japan Social Innovation and Investment Foundation.
ImpactAlpha’s Jessica Pothering will lead a discussion with RS Group’s Annie Chen and Sana Kapadia of Heading for Change on how Asia’s investors are defining impact investing on their own terms. ImpactAlpha is SFi’s Impact Summit’s media partner.
Asian mosaic
Yung describes the Summit, part of SFi’s broader Impact Week, as an effort to create both a convening point and a catalyst for deeper regional collaboration. Toniic, The Nature Conservancy, Barclays, Builders Vision, New Forests, Antares Ventures and Centre for Sustainable Finance and Private Wealth are hosting side events throughout the week on family office impact investing, nature-based solutions, and investing at the intersection of energy, infrastructure, AI, and industrial transition in Asia.
In Asia, different markets are evolving in distinct ways.
Singapore benefits from strong government support and intermediary networks led by Temasek, Singapore’s state-owned investment firm. Japan’s ecosystem has been shaped by pension funds and policymakers. Hong Kong, with its blended history, is carving a role as a hub for cross-border collaboration and blended finance experimentation.
According to SFi’s recent survey of asset owners, more than 90% of respondents allocate to sustainable investments, while 17% dedicate more than half of their portfolios to such strategies.
Yung points to growing partnerships between Hong Kong and Singapore, and increased coordination among investors in Japan, South Korea and China. “Impact investing is here to stay, and we must just band together and keep trying.”
Aligned capital
With impact investing facing headwinds in the US and Europe, fund managers from the West are traveling to Asia in search of capital from wealthy families and institutions.
More than half of the capital for Leapfrog Investments’ $1.15 billion fourth fund came from Asian investors, including Temasek and Hong Kong insurer AIA. Last year, London-based TLG Capital, with a focus on small business finance in Africa, raised capital from Singapore-based Tsao Family Office.
Yung cautions that many Western impact pitches still miss the mark with Asian family offices.
“Family office investors are looking for something that’s beyond the financial return,” she says. They often want investments that complement their operating businesses, provide learning opportunities around issues such as biodiversity or agriculture, or create pathways for deeper engagement with communities.
Yung says that for many Asian families, the move toward impact investing is less of an ideological transformation than a natural extension of values-driven operating businesses.
“That sort of instinct and DNA around impact for family offices in Asia has always been around,” Yung explains. “It’s just that the term has not existed.”
Unlike many Western family offices, Asian family office wealth often remains embedded in family-run businesses, which is in turn shaping how these families think about deploying capital for impact.
“We see that their way of looking into impact investing is tied to their operating business,” Yung says.
“Now” generation
Families who made their fortune in the textile and apparel industries, for instance, are backing ventures focused on material innovation, supply-chain traceability and circularity. Other business owners are investing in technologies and sustainability strategies that help “future proof” the core operations of their companies.
That orientation is pushing Asian family offices toward private markets. Venture capital, private equity and direct investments rank among the top impact asset classes for families in the region, according to Yung.
At the same time, families are experimenting with blended finance, recyclable grants and outcome-based financing structures to stretch their philanthropic dollars further.
The transition to impact isn’t always frictionless. Asian family offices still navigate tensions around “legacy and innovation, control versus empowerment and preservation versus growth,” Yung says.
But the data suggests the debate is shifting. According to SFI’s survey, 63% of respondents said family members need convincing on the potential for impact, but already see value in considering it alongside financial returns. Only 25% described a starker “either/or framing,” where impact and profit are treated as fundamentally in conflict.
Some families are making impact investments personally to demonstrate that returns and impact can coexist. Others are creating carveout portfolios or testing new approaches through corporate venture vehicles linked to the family business.
“One family said conflict is actually not a bad thing,” Yung recounts.
Even amid broader market uncertainty, Yung sees optimism driving the region forward. Says Yung, “People are still trying to be glass half full,” she says.
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