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BLOG - HNWIs to invest €1trillion in sustainable investments
Climate Capital Network (http://www.climatecapital.net) - Eurosif has just published a ground-breaking report on High Net Worth Individuals (HNWIs) & Sustainable Investment. This timely study, sponsored by Bank Sarasin & Co. Ltd and KPMG International, highlights a fast-growing segment where investors are seeking returns while engaging on sustainability issues.
Eurosif estimates that sustainable investments represent approximately 8% of European HNWIs’ portfolios as of December 31, 2007 and predicts that by 2012 the share will have increased to 12%, surpassing the €1 trillion mark. The sustainable investment strategy most often employed among HNWIs is thematic investment, with clean energy and water as their preferred sustainable themes.
There are three drivers in the intersection of HNWIs and sustainable investing that will lead to future growth of the SRI market in the coming years:
- The amount of wealth available for investing by this group is at an all time high and projected to expand further.
- The demand for ‘sustainability criteria’ as an offering within this sector is growing largely due to a generational shift in thinking about capital growth and preservation as well as financial out-performance prospects.
- HNWIs have transitioned from only doing philanthropy to increasingly integrating sustainability criteria in their actual investments, reflecting a growing consensus that financial returns are consistent with sustainability issues.
Andreas Knörzer, Managing Director of the Sustainable Investment business unit at Bank Sarasin, says “The results of the study clearly show that wealthy investors are at the heart of sustainable investment. Eurosif’s research in this area clears up the distorted picture that large private capital owners are responsible for most ecological and social problems today. Investment strategies of High Net Worth Individuals are not part of the problem, but creating paths towards the solution.”
The market is currently in an early, high growth phase with 72% of respondents seeing an increase in HNWI interest for sustainable investment in the last 12 months, principally driven by market demand. In spite of the recent market turmoil, 87% of respondents think the interest for sustainable investments will grow in the next three years. Moreover, 75% of surveyed family offices think that sustainable investment will increase in the generational transfer of their family’s wealth.
Tom Brown, European Head of Investment Management at KPMG states, “Ultimately, the international High Net Worth market is likely to provide a significant source of private sector capital to complement public sector funding of sustainability focused industries, products, services and business practices. Its potential relevance to financial institutions, governments, and regulators as a source for sustainable business growth and a contributor to global emission reduction strategies is clear.”
The study shows that HNWIs are open to new and alternative sustainable investments. Eurosif executive director Matt Christensen says “Servicing the HNWI segment offers great opportunities for product innovation which could eventually prove useful for other investor segments such as institutional investors. About a third of sustainable products are currently bespoke sustainable investments, which are vital to product development.”
Based on the findings of this survey, Eurosif is convinced that the growth of HNWI interest in sustainable investment will steadily correlate towards a greater openness to integrate these issues into other levers of society.
To view the report please go to www.eurosif.org/publications/HNWI_sustainable_investment_study
Click here for report >>BLOG - Cleantech beats economic slowdown
Climate Capital Network (http://www.climatecapital.net) - Madonna, Paul McCartney and Google are doing it and private equity has followed. Going green is cooler than ever, according to data published by researcher New Energy Finance. The clean energy sector received a record level of investment from venture capital and private equity firms this year following a surge of more than $5bn (€3.3bn) in the second quarter, according to the data. The combined global total of $8.4bn in the first half represented a 17% increase from the $7.2bn invested in the sector in the same period last year and a 65% increase from the same period in 2006.
Deal sizes have grown too. Investment bank Jefferies published its fifth cleantech review which found a significant increase in financing rounds of more than $100m in the US. In the second quarter this year, nine companies raised more than $1bn from private equity funds, smashing the previous record of $422m from the third quarter last year. Ethanol producer Osage Bioenergy raised the most with $300m.
BLOG - Corporate VC turns to cleantech
Climate Capital Network (http://www.climatecapital.net) - More and more corporate venture capitalists, (the investment arm of corporations) are investing in cleantech startups. Large companies such as IBM, Google, Chevron, Motorola, are investing directly into the cleantech sector. According to New Energy Finance, this is one of the reasons why, total VC investment has slightly decreased, but investments in cleantech has risen by 17% from last year and 65% since 2006.
BLOG - Fortis launches 400m Euro clean energy fund
Climate Capital Network (http://www.climatecapital.net) - Fortis Bank, the Benelux financial conglomerate has invested €50m into a private equity fund managed by recently acquired ABN Amro. The fund is trying to raise €400m and will invest in clean energy with a focus on wind energy. It will be managed by Joost Bergsma, a partner, who previously advised a number of European companies. Please go to Fortis for further information >>