Hong Kong fund managers are cautiously warming to ‘impact investing’

PUBLISHED : Saturday, 14 October, 2017, 3:00pm
UPDATED : Saturday, 14 October, 2017, 3:40pm

Investing with the intention of generating a discernible social impact, along with positive financial returns, has begun to attract a trickle of interest among those charged with overseeing family trusts in Hong Kong.

Known an “impact investing”, the intention is to help bring about a positive social outcome, while still employing sound investment management principles.

Dee Dee Chan, who helps oversee her family’s philanthropic foundation along with her father, says she has warmed to the concept, even as the idea has yet to fully catch on with her peers.

“My peers and I have control over a lot of our families’ investments, but not many that I know of have plunged into impact investment in a major way,” Chan said.

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“Most of my friends are allocating maybe 5 per cent of their funds as it is still new to us, since we still have to answer to our families and we can’t risk everything.”

Chan, who was born in Hong Kong and grew up in the US, has emerged as the fourth generation to manage her family’s philanthropic foundation, taking up the role of director at Seal of Love Charitable Foundation in 2013.

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The former investment banker, who worked in New York and Hong Kong for five years, left the industry to become a teacher.

She now spends most of her time co-managing her family’s investments, while on the side running family-related philanthropic projects. This includes a charitable foundation that supports non-government organisations focusing on education.

Her late grandfather Chan Chak-fu built a global hotelier empire from scratch in the 1950s, which includes the Park Lane Hotel in Causeway Bay.

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Her great-grandfather Chan Kwan Tung started the family legacy of philanthropy by building elderly centres, kindergartens, and university halls in Hong Kong.

Among investments with a positive social impact, Chan has selected immuno-oncology research and micro finance ventures in Southeast Asia that help rural families start their own businesses.

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“I have also invested in a women’s impact investment fund which is run and funded by women,” she said. “It uses a gender lens to assess investment opportunities in education, health, food sustainability, clean energy and energy saving technology that meet social, environmental and profit criteria.”

Still, she considers herself a neophyte in impact investing.

“I still see myself as a traditional investor,” she said. “I am a beginner in impact investing and am still learning the different tools for making a difference while making money.

“The challenge lies in finding the resources and tools to achieve the social objectives while not sacrificing returns.”