Co-author: Tsao Family Office
3 minutes read
Family offices, longtime exemplars of values-based investing, are becoming more active impact investors. Among some of the very first movers in the Asian impact investing market, family offices, especially those run by younger generations, are continuing to mobilise capital towards sustainable and impact investments.
Networks of family offices, including The Family Office Circle Foundation, The Sustainable Finance Initiative, and The Wealth Management Institute’s Global-Asia Family Office Circle, are facilitating community building, knowledge sharing, and collaboration in the region, signalling to the broader Asian market that impact matters. With the early growth of the Asian impact investing market, family offices have emerged as essential allocators, having the ability to channel meaningful amounts of capital towards impact and to ensure the ecosystem scales with integrity.
The number of family offices in Asia Pacific (APAC) is growing rapidly. The Monetary Authority of Singapore reported that Singapore-registered family offices leapt from just 50 in 2018 to 1,100 at the end of 2022. Given the nascency of many Asian family offices, often led by the first generation, APAC family offices lag behind counterparts in Europe and North America in terms of impact investing activities.
However, a significant generational wealth transfer over the next decade is expected. According to the Raffles Family Office Asia-Pacific Family Office Report 2023, 71% of surveyed APAC family offices anticipate a generational power shift in the next ten years, with younger generations, typically more interested in impact, taking the helm. Along with new governmental pushes to promote sustainable and impact investing, particularly in Singapore and Hong Kong, APAC family offices’ uptake of impact investing is likely to grow in the coming years.
Reflections from BlueMark’s first verification of a family office in Singapore
BlueMark, the leading provider of independent verification for the sustainable and impact investing market, recently engaged with Singapore-based Tsao Family Office (TFO) to assess the family office’s impact strategy and approach relative to industry standards. Central to TFO’s strategy is the acknowledgment of the importance of impact – to investees, fellow investors, and the broader market. TFO’s current engagement approach focuses on adding value by providing feedback on investees’ impact management, and facilitating collaboration for impact fund managers.
TFO also actively contributes to the growth of Singapore’s impact investing ecosystem, by collaborating on research initiatives to contribute to public education and connecting with family offices and asset owners to share their own experience, especially those beginning to explore impact.
In order to strengthen TFO’s impact contribution strategy, BlueMark recommended the family office more systematically track its engagement with investees, as well as the results of those engagement efforts. BlueMark also suggested documenting instances of the family office’s market-building activities more systematically. By doing so, the family office can demonstrate that its activities translate into realised impact, both for its investees and the broader impact investing ecosystem.
“Our engagement with BlueMark allowed us to look critically at our current impact measurement and management processes, highlighting opportunities to bring rigour and formalisation to how we approach impact management at TFO. Family offices play a hugely critical role in scaling the impact investing market with integrity, and working with independent incisive third-party verifiers such as BlueMark helps us to do so,” said Bryan Goh, CEO of Tsao Family Office
BlueMark’s engagement guided TFO’s path towards refining and optimising their impact management system for long term success. Through impact verification, family offices are provided with invaluable guidance and recommendations, enabling them to fine-tune their impact management processes, and facilitating the translation of impact intentions into investment strategies that drive social and environmental outcomes across Asia.
