Asset owners in the Asia Pacific region are making waves in the world of impact investing, as they reallocate portfolios and invest responsibly amid macroeconomic and geopolitical shifts. Institutional investors globally are taking action to better position their portfolios for the future, identifying new opportunities in private markets and previously under-utilised sectors.
Increasing Allocations to Private Equity and Infrastructure
According to recent surveys, 62% of asset owners in APAC are planning to increase allocations to private equity, and 61% are planning to increase allocations to infrastructure. Most institutions in APAC (67%) are also dialling up inflation risk mitigation. Private assets and other alternatives are poised for higher allocations, with 72% of investors planning to increase exposure to private markets over the next five years.
Focus on Environmental and Social Impact
As the trend towards socially responsible investing gains momentum, 78% of investors in APAC either consider or plan to consider the impact on the environment and society when making investment decisions. Two-thirds of APAC investors agree that impact investments will be an increasingly important allocation for them in the coming years.
Amalgamated Bank and Ethical Investing Practices
Amalgamated Bank, for example, decreased its stakes in Altria Group by 4.7% during Q4 2021. Altria Group is the parent company for Philip Morris USA and other cigarette brands. This decision reflects a growing interest in ethical investing practices among institutional investors, as Amalgamated Bank implements environmental sustainability practices into its investment portfolio.
Chapel Hill Denham and Renewable Energy in Nigeria
Another example of impact investing driving social change is the partnership between Chapel Hill Denham and the Rural Electrification Agency (REA) in Nigeria. This collaboration aims to drive solar power adoption and facilitate financing for off-grid electrification projects, contributing to Nigeria’s energy access goals and economic development. Chapel Hill Denham brings its expertise in financing renewable energy projects and promoting sustainability principles to the partnership, having led approximately 80 percent of green bond issuances in Nigeria.