The conversation around impact investing centres on the alternative view that a considered approach to deploying capital can produce outsized impact for the greater good, whether for communities or the environment. This theme is growing increasingly important, with individuals and organisations now placing greater emphasis on their core values when evaluating where they should allocate their investment capital. A recent study estimated the size of the global impact investing market to be nearly US$1.2 trillion in assets under management (AUM) at the end of 2021—up 63 per cent since 2019.

A rethink on returns

Social entrepreneur Alvin Li has been deeply involved in impact investing for more than a decade. Since graduating with a Master’s in Management from the University of Cambridge, he has co-founded several social enterprises. The multi-hyphenate credits a trip to Africa for his conviction in the potential of businesses and investments to drive social and environmental changes.

“It’s one thing to understand how impact investing works on paper, but it’s a whole different matter to see it in action,” he declares. “In 2013, I brought my father to rural Ghana to conduct due diligence for an investment into microfinancing. Our perspectives were forever changed after we met several microentrepreneurs, who had so much passion and conviction to serve their communities. The experience will forever remind me that behind every business we invest in is a team of people who are using their strengths to make the world a better place.”

Li has anchored his focus on impact investing ever since and currently serves as head of impact at his family’s Asia-based single family office (SFO). He is one of the many SFO clients that DBS Private Bank has been working with to collectively enact positive impact via their investments, businesses, and philanthropic endeavours. To date, the bank has helped set up one in three SFOs in Singapore, and seen its AUM more than double over the last two years.

As a second generation client of DBS Private Bank, Li has recently invested in Heritas Capital’s Asia Impact First Fund (AIFF) together with his father. Launched in August 2022, the AIFF has a targeted fund size of US$50 million, and seeks to back 10 to 15 innovative and high-growth social enterprises across Asia. With growing support from DBS Private Bank’s clients who are expressing more interest in venture philanthropy, the fund adopts an impact-first philosophy where returns are viewed not only through the lens of financial gain, but also long-term impact outcomes, which allows it to take a patient stance when investing in social enterprises.

My father and I were sure that the fund would serve as a financially viable example of impact‑first investing because its knowledge partner, DBS Foundation, is on the ground leading the efforts to empower these social enterprises.

Financial viability aside, Li points out AIFF’s progressive philosophy as another reason for investing in it. “Here, value is also about how you’ve changed someone’s life for the better through investments in a social enterprise—without the traditional mindset of financial returns,” he opines. “‘Impact-first’ in this case includes patient capital, with no pressure or motive for a quick profit. We want to support that first leap of faith, by helping these founders through their funding gap.”

The fund announced a successful first close last month, having raised over US$20 million from anchor investor DBS, which committed half the amount, and other like-minded and impact-focused parties such as Tsao Family Office, IMC Group and Ishk Tolaram Foundation, among others. “Through AIFF, clients can have peace of mind that their money is going towards a carefully curated and stringent selection of social enterprises that will make the best of it to drive real impact, for the betterment of society,” said Lee Woon Shiu, group head of wealth planning, family office and insurance solutions at DBS Private Bank and DBS Foundation board member.

Impact beyond banking

As a social entrepreneur himself, Li has first‑hand experience on the crucial factors necessary for a start‑up’s success. “What we found was that it really helps to partner closely with well‑networked platforms that can provide a wide range of support, from mentorship to client connections,” he reflects. “When it comes to ‘raising’ a small enterprise, it really does take a village.” On this front, DBS Foundation’s involvement is a tremendous boon. Li himself would be intimately familiar with the holistic support that the foundation offers — Givo, which he co‑founded in 2015, was a recipient of the DBS Foundation Grant Award in 2016.

As the headlining programme for the foundation, the DBS Foundation Business for Impact Grant Award has, since 2014, provided over S$13 million in grant funding to support more than 100 businesses that are looking to scale their double bottom-line of profit and impact. This is in addition to non-financial support such as skills-building and networking opportunities.” The numbers speak for themselves: the 2022 edition of the grant alone is expected to abate 300 tonnes of greenhouse gases, reduce food waste by 100,000 tonnes, and benefit two million people in various ways.

On a broader scale, DBS is working on various levels to effect positive change, whether via or beyond its core business of banking. Over the first 10 months of 2022, for instance, the bank has helped its clients raise more than S$24 billion in funding for various corporate environmental, social and governance (ESG) purposes—a 26 per cent growth over the same period in 2021. As part of efforts to galvanise its clients to participate in advancing the sustainability agenda, DBS Private Bank continues to educate and encourage clients to move towards sustainable investments—today, these make up more than 60 per cent of private banking AUM, ahead of the bank’s initial target of 50 per cent. DBS also committed an additional S$100 million in 2022 to enhance its support for DBS Foundation’s mandate, which has expanded to support a wider remit of innovative purpose-driven businesses, including SMEs, and boasts a new ‘Community Impact’ chapter focused on giving back to the community. The funding will also be used to support the bank’s philanthropic and crisis relief measures.

There has been a broader shift towards a more measured approach towards finance and investment in recent years. DBS has shown that it is possible to, with the right partner, apply a sustainability and socially conscious lens to wealth management and business operations seamlessly—to not only keep up, but evolve. Alvin Li’s passion and purpose in impact investing will soon set the bar on how we pay it forward.

This article is presented in partnership with Tatler Singapore.