Clients across Asia have shown increasing interest in "impact investing" by offering capital as a means to sustainably address social and environmental challenges, says Credit Suisse.
Impact investing refers to investments that seek to generate a financial return while creating a measurable positive social and environmental impact, according to Credit Suisse.
"Clients across Asia have demonstrated increasing interest in impact investing as a way of contributing capital to solving the region's social and environmental challenges in sustainable ways," said Joost Bilkes, head of impact advisory and finance for Asia-Pacific at Credit Suisse.
Some of the client profiles interested in the bank's impact investment offering are next-generation investors, with their enthusiasm for social and environmental responsibility when doing business; those who think philanthropy alone is not enough; and believers in uncorrelated internal rate of return, referring to investing in uncorrelated private equity solutions with attractive returns that target investments in rapidly growing countries in the world at attractive valuations.
Impact investing activities at Credit Suisse include investments in small and medium-sized enterprises (SMEs) with a social or environmental mission and the development of financial products, such as those designed to support small farmers and high-potential students in developing countries, Mr Bilkes said.
The vehicle's strategy is to invest in companies whose business models address key social challenges with private-sector solutions, he said.
Sectors for impact investing include agriculture, healthcare, sanitation, housing, education, water, clean energy and those with access to finance.
SMEs across markets like China, Vietnam, Cambodia, Laos, Myanmar, Indonesia and the Philippines have struggled to gain access to risk capital and value addition, such as management capacity-building and strengthening of corporate governance, Mr Bilkes said.
Fund managers have more than a two-decade track record in managing SME private equity investment, while Credit Suisse's 16 years' experience creating innovative impact investment products adds to proficiency.
Assets invested according to sustainability criteria at Credit Suisse rose to over 25 billion Swiss francs at the end of 2018.
Asia has surpassed US$1 billion (30.72 billion baht) in assets under management invested according to sustainability criteria.
Credit Suisse's impact investing business includes more than $7 billion in assets under administration and over $2 billion in client holdings.
