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Private investors in Asia slow to integrate environmental, social and governance factors. The $1.4 trillion Government Pension Investment Fund of Japan is integrating environmental, social and governance, or ESG, factors into its investment practices. But family offices, wealth management teams, private equity and venture capital investors in Asia are lagging in adopting such risk-management frameworks. Only 1% of total managed assets in the region are invested using ESG practices, according to a new report released at the Asian Venture Philanthropy Network conference in Singapore last week. That’s far short of the 50% adoption rate in Europe, Australia and New Zealand, 37% in Canada and 21% in the U.S., as of 2016.
A generational transfer of wealth could accelerate adoption of not only ESG, but of more ambitious impact investing. An estimated 35% of Asia’s wealth will be in the hands of the millennial generation in the next five to seven years. “The millennials tend to be savvier in understanding that they do not always need to sacrifice financial gains to make a positive impact,” said Vic Malik of Standard Chartered Private Bank. That, he said, “will be a key differentiator in further developing the ecosystem and moving sustainable investing into the mainstream.”
Read, “Private investors in Asia slow to integrate environmental, social and governance factors,” by Michael Standaert on ImpactAlpha.
Dealflow: Follow the Money
Deal of the Day: Lumkani raises seed funds to insure slum residents against fires. The startup raised seed funding to expand its sales of networked heat detectors and insurance to residents of informal settlements and slums. Read all about it.
Anzu Partners backs battery analytics startup Voltaiq. The firm’s tools improve battery performance. Energy storage is key to deployment of intermittent wind and solar power generation. Learn more.
LendStreet closes Series A and $110 in debt financing. The startup offers customers struggling to repay debt a discounted loan to pay off existing creditors. Get the details.
Signals: Ahead of the Curve
Blended finance is key to hitting goal of $3 billion investment in women by 2020. Overshadowed by the discord at the weekend’s Charlevoix G7 summit was a rare consensus: development finance institutions in the seven countries joined together to send “a powerful message to the markets that by investing in women we can change the world,” said Ray Washburne, head of the U.S.’s Overseas Private Investment Corp. OPIC was joined by so-called DFIs from Canada, the U.K., France, Italy, Japan and Germany in endorsing the “2X Challenge,” a plan to mobilize $3 billion for investments in developing countries that advance women’s leadership, employment, access to capital and other support for their economic participation and inclusion. (2X refers both to the multiplier effect of investing in women and to the female chromosome.) Hitting the target will require the DFIs to use their own funds to “crowd in” private capital with blended financing and other innovative structures to mitigate risks and boost returns. “This is such an opportunity to galvanise the field and bring new partnerships and collaborations forward,” said Suzanne Biegel, co-producer of the Gender-Smart Investing Summit in November in London.
Pattern breaking: Backstage Capital backs 100th diverse founder. Back in 2015, Arlan Hamilton pledged to back 100 woman, LGBTQ or person of color founders by 2020. Last week, she said her Backstage Capital already has hit that goal. “They said it couldn’t be done,” Hamilton tweeted. Brian Brackeen, CEO of Kairos, a facial-recognition startup backed by Backstage, responded, “These 100 companies represent thousands of others that Silicon Valley VC’s said they could not find, or simply ignored.”
- New Revivalist: “If the problem is that people are pattern-matching, that means there should be more people like me writing checks,” Hamilton told ImpactAlpha for our series on people reviving entrepreneurship in America.
- The Backstage 100: Portfolio companies include LendStreet, Solstice, Blendoor, O.School, Pilotly, Novoron and more.
- The limited partners: Among Backstage’s 50 LPs are Sian Morson, Marc Andreessen, Rakesh Agrawal, Rashad Moore, Chris Sacca, Anne-Michele Harrington and more.
- Take a look: What portfolio diversity looks like:
Agents of Impact: Follow the Talent
Swiss impact investment manager BlueOrchard is opening an office in Singapore… Village Capital and PayPal are recruiting data-driven startups making U.S. financial services more more accessible, affordable or transparent… SOCAP 365, Veris Wealth Partners, and PAX World Mutual Funds are hosting “Chasing Solutions: Financing Climate Action,” June 20th in Boulder, Colorado (Use discount code Friends365)…Don’t forgot SOCAP 365’s“Activating the Full Spectrum of Capital,” in Austin, June 19th (where you can use the same discount code).
— June 11, 2018.