As wealth changes hands to a new generation of socially engaged millennials in the coming years, the social, responsible and impact (SRI) investment space is set to see significant inflows.
With 91 per cent of millennials interested in sustainable investing, our experts predict that rising millennial wealth could drive SRI investment to USD400 billion by 2020, up from USD77 billion today – and fintech is why.
According to Innovation in Investment, the first in a series of reports we have developed in partnership with the Economist Intelligence Unit, fintech could help make green and impact investment mainstream, with millennials leading the change.
Fintech solutions will make it simpler for tech-savvy millennials to access SRI investments, effectively expanding the borders of an investment space that until recently has been limited to institutional investors such as hedge funds.
No compromise on financial returns
At a recent seminar for our Private Banking clients, a panel of experts pointed to growing evidence that creating social impact does not mean compromising on financial returns. This is helping to make SRI investment more popular.
Two leaders in impact investing – Asia-focused private equity firm Bamboo Capital and the International Finance Corporation (IFC) – invest to meet targets for both development impact and financial returns, and have consistently reported competitive investment yields.
"SRI investments give socially conscious millennials a chance to invest in sectors and areas that matter to them"
At our seminar, Adam Sack, head of IFC’s Emerging Asia Fund, highlighted that since 2000, the fund’s 380 equity investments have delivered realised returns of 26.7 per cent per annum. For context, this is in the top quartile of traditional private equity returns.
SRI investments give socially conscious millennials a chance to invest in sectors and areas that matter to them, forging a personal connection that goes beyond conventional financial returns.