High-net-worth individuals (HNWIs) in the Asia-Pacific region are rethinking their portfolios across prominent themes of sustainable investing and private assets for growth and diversification, but many have yet to take the plunge, according to a recent study.
Overall, Asia-Pacific HNWIs continue to see sustainability investing as a genuine opportunity, finds Geneva-headquartered private bank Lombard Odier’s fourth annual Asia-Pacific HNW Individuals study, which was based on a survey of over 460 HNWIs in Singapore and around the region. Well over half, 60.9% of respondents think it is essential or aspirational to invest in sustainability, while 77% of respondents agreed or strongly agreed that taking into consideration sustainability factors can help deliver superior returns.
As might be expected the research found that incorporating sustainable investing into their portfolios is particularly true for the region’s younger generation, who are more prepared to be advocates of shareholder activism and impact investing. As such, 32.4% of under-45s say sustainability is an essential focus compared with 21.7% of over 45s.
However, not all of the region’s HNWIs remain convinced about investing into the environmental transition and remain cautious about investing in sustainability, with only 18.4% fully agreeing they “have actively increased or plan to increase the proportion of sustainability investments”.
“Even as Asia-Pacifc HNWIs have a deep understanding of their own aspirations, there is clearly a gulf between their intent and their actions,” says Vincent Magnenat, limited partner, Asia regional head and global head of strategic alliances at Lombard Odier. “We also see the divide in perspectives between generations, and a continued emphasis on sustainable investing and emergence of private assets in managing risks when it comes to allocations.”