Around 40% of the US$325 million that UBS Wealth Management raised for an impact investing fund came from private banking clients based in Asia, Juerg Zeltner, president of UBS Wealth Management, tells Asian Private Banker.
The Swiss lender announced on Monday that it had raised US$325 million for the Rise Fund, a social impact private equity fund managed by TPG Growth. The fund will invest in seven sectors – education, energy, food and agriculture, financial services, growth infrastructure, healthcare, and technology, media and telecommunications – and will target growing companies in both developed and developing markets.
“What this really shows is that there is a growing demand in today’s world to complement financial returns with impact,” Zeltner says, adding that when excluding Wealth Management Americas, 60% of the total amount raised by the private bank came from clients in Asia.
Sergio Ermotti, group CEO at UBS, said in a statement that he hoped the capital raised will “encourage our clients and others to support similar ventures and help make the world a more sustainable place”.
Indeed, UBS has been an active player in the nascent impact investing space, capitalising on growing demand among its Asia-based private banking clients.
Last year, the bank raised US$417 million for the Oncology Impact Fund, 60% of which came from clients in Hong Kong and Singapore. Hong Kong-based investors were the biggest contributors (US$167.3 million) while Singaporean investors contributed US$116 million and US$122 million came from Swiss investors.
At the World Economic Forum Annual Meeting 2017 in Davos, UBS pledged US$5 billion for impact investments related to Sustainable Development Goals (SDGs) over the next five years. “Private wealth investment tends to be longer-term and hence aligned with the SDGs, and also has fewer constraints than institutional capital,” according to UBS.
“It can be incentivised by mainstreaming SDG-related impact investing, enhancing SDG funding gap data and measurement, standardising investment terms and disclosures, and connecting investors with opportunities via platforms and other initiatives.”
Impacting investing, an approach that aims to engender a determinable positive social impact as well as a financial return, has been touted as the silver bullet for philanthropy. Yet momentum has been slow in Asia with many HNWIs wary of how the impacts of such vehicles are measured, and the relative dearth of track records.
However, Zeltner says banks have an important role to play in the impact investing space.
“If banks play a critical role in being an intermediary for the good cause, we can create unbelievable scale effects,” Zeltner says. “I believe there is a cause and purpose for us to innovate and contribute to the betterment of society.”