Blackstone - one of the world’s largest private market investors - has added fresh hires to its private wealth solutions team in Hong Kong and Singapore in a bid to further tap the region’s high net worth individuals (HNWI) in real estate and private credit investing.
With the Asia Pacific region currently accounting for 42%, or $218 trillion, of total global wealth, according to a recent McKinsey report, Blackstone's expansion aims to tap this robust growth, expanding its team in Singapore, Hong Kong, Tokyo, and Shanghai to 30 people over the past three years.
Blackstone is eyeing Greater China, Southeast Asia and Japan as pilot markets, which it sees as strong wealth management hubs with high demand.
Quantifying sustainablity factors and making judgement calls on portfolio companies based on ESG factors is alredy challenging, but adding Asian considerations to an established, developed market framework, is even more so.
Nevertheless, Sun Life incorporates ESG considerations into all of its investment processes and decisions, said Hong Kong-based Shiuan Ting van Vuuren, CIO for Sun Life International HuBS, which covers the general accounts in Hong Kong, Bermuda, and Singapore.
The team will give weight to different ESG factors based on characteristics of the assets or companies, to come up with a final ESG score. For example, a bank will be given more weight in governance, while environmental factors matter more for an energy company.
“We really think that if you incorporate ESG into your investment strategy, it helps you to better manage your risk. You can navigate through volatility and downturn over time,” said van Vuuren. “A byproduct of that is because you manage risk, you avoid the big pitfalls. As a result of that, you get a higher return.”
Singapore’s Temasek Holdings has launched a new investment subsidiary GenZero with a start-up capital of S$5 billion ($3.64 billion) and the mandate to invest in projects and companies that will accelerate the process globally.
GenZero, wholly-owned by Temasek, will seek opportunities under three headings: technology-based solutions that aim to deliver decarbonisation outcomes; nature-based solutions that protect and restore natural ecosystems; and companies and solutions that support the development of an efficient, credible carbon ecosystem.
As the brain drain in Hong Kong continues, chief investment officers (CIOs) have had to work harder to retain talent by providing a supportive working environment and being proactive with people management.
“If the pool of actuaries and investment professions in Hong Kong shrinks as some expats go back to their home countries, and the overseas and China onshore professionals have become less mobile due to Covid, it becomes more difficult for everyone to hire and retain talents,” Richard Chan, the AXA Hong Kong CIO and Asia head of asset-liability management (ALM), told AsianInvestor.
Chan’s team has grown by over 50% since he joined AXA in 2018, and his team of 14 investment professionals including himself, responsible for $25 billion of assets as of the end of March, survived most of the pandemic without losing staff.
But Chan believes it’s not all about Covid restrictions. Accounting standard changes like Hong Kong’s new risk-based capital regime (RBC) and IFRS17 for insurers also increase the demand for actuaries and other financial talents, he noted.
The practice of green- or other washing (providing exaggerated claims about the environmental, social or governance impacts of a fund) should result in tough punishment, Yoo-Kyung Park, Asia head for sustainable investing and governance for APG, has told AsianInvestor.
Despite publicly committing to engagement on environmental, social and governance (ESG), Asian asset managers remain conflicted, she said.
“In Korea, for example, all the local asset managers say that they take ESG into account. But can they be completely independent when it comes to critical decisions [concerning] companies owned by large groups like Samsung Group, SK Group or LG Corp?” Park said.
APG's own investment approach prioritised public disclosure around how it engaged with companies it owned, by contrast, she said.