Asia, impact investing to gain as US$15 trillion change hands among world’s wealthiest families over next decade
- The ESG sector is growing extremely rapidly, BlackRock says
- Singapore and Hong Kong to continue to compete for international wealth management business
Asia and impact investing look to gain as wealth is transferred between generations among the world’s wealthiest families over the next decade.
As much as US$15.4 trillion will be passed down from one generation to the next until 2030, according to global wealth researcher Wealth-X. The company looked at people holding US$5 million in assets or more, which amounted to 2.6 million people collectively holding US$57 trillion in assets.
The biggest transfers are expected to take place in Europe and North America, with US$8.8 trillion changing hands in the next decade. Of this, US$3.2 trillion will be transferred in Europe.
The transfer will be relatively smaller in Asia – US$1.88 trillion – as business owners in China and India are relatively younger.
The shift to a younger generation could trigger new interest in impact as well as ESG [environmental, social and corporate governance] conscious investing, Wealth-X said. It said that while preserving wealth was the main interest, younger inheritors were also “noticeably” more concerned about the impact of their wealth on society and the environment, shown by an increasing interest in impact and responsible investment.
Scott Hasley, the managing director and head of US/Canada family office business at BlackRock, said in a statement: “The ESG sector was something very few of our clients were interested in a handful of years ago. While it remains a relatively small asset class, it is growing extremely rapidly. Today, I would estimate that 80 per cent of our clients are directly investing in equity, fixed income and/or alternative ESG solutions, or exploring the asset class in earnest.”