Yvonne li

Redirecting Capitalism for Responsible Wealth Management

TBLI Europe, November 2011

Yvonne Li ([email protected])

Standing at 7 billion

Sustainability issues in:

Food

Water

Healthcare

Natural Resources

Education

Energy

Environment

The ‘Dark Side’ of Capitalism

Short term shareholder value by firms

Maximise profit with little disregard for externalities and costs to society and the environment

Causing imbalances in global economies and trade

Unmitigated pollution

Remember Foxconn

Industry lobby groups

Perception of Finance in 2011

Euro debt woes

Financial meltdowns

Volatility in food and resource commodities

Financial mismanagement

Ponzi Schemes

Speculation

Derivatives

Financial engineering

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Impact Investing

Investments intended to create positive impact beyond financial return

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Spectrum of Objectives

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Missing Middle Finance

Social Finance

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Why Social Enterprises matter

Social/Environmental

Impact

Enhance localcommunities’

livelihood Community

Empowerment Promote sustainable

agriculturalpractices

Preserve scarcenatural resources

Use clean energyand reduce harmfulgreenhouse gases

Financial Impact

Balanced set offinancial returns

Generating profitsto scale impact

Create disposableincomes thereby

stimulating vibrantlocal economies

Why Asia matters

A key growth region for any investment portfolio

Demographics: by 2050, Asia will have 5.4 billion people, constituting 53% of the

world’s total population Rising inequality with record numbers of UHNW joining the global

elite, growing middle class with 1b still living on less than USD1.25 per day

Major socio-economic trends An ageing population Untapped mass “Bottom-of-the-Pyramid” Market Environmental concerns compounded by climate change and

consumption challenges

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Demographic Challenge: Getting old before getting rich

Bed-to-elderly-population Ratio in China

OECD countries average ratio: 4.35%

Market Size Estimation for Elderly Care

Potential Market Size in Asia

Refer to AV’s report Beyond the Margin: Redirecting Asia’s Capitalism

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Large demand but not necessary investable

Impact Investing and Wealth Management

Impact investing can be integrated into a balanced portfolio, and regarded as a prominent emerging market strategy. Provides investments in line with personal and family values An investment into key social and environmental trends Aligning investments with priorities of Asian governments,

generate profits on fair costs whilst generating positive social and environmental impacts.

22% of total assets held by HNW are invested in Asia Pacific to the tune of USD8.6 trillion.

A 1% allocation is what it would take to allow social enterprises to scale.

Rational for Responsible Wealth Management

Uncorrelated asset class, reduce volatility

Reasonable returns with reduced risk

Sustainable investing taking into account of triple bottom line

Long term investing

Ultimate emerging market investment strategy

Investing in the most important businesses of the future

Asian based

Support entrepreneurship and local economic development as drivers of poverty alleviation

committed to addressing social & environmental needs

Missing Middle finance; critical investments of USD0.5 to USD3 million

ensure FINANCIAL SUSTAINABILITY as a means of pursuing their bigger agenda

create a sustainable future for Asia

Avantage Ventures