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Beyond the Margin: Redirecting Asia’s Capitalism

Beyond the Margin: Redirecting Asia’s Capitalism. 35 th ADFIAP Annual Meeting, 25 th April 2012 Yvonne Li, Avantage Ventures yli@avantageventures.com. Avantage Ventures. To create a sustainable future for everyone in Asia.

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Beyond the Margin: Redirecting Asia’s Capitalism

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  1. Beyond the Margin: Redirecting Asia’s Capitalism 35th ADFIAP Annual Meeting, 25th April 2012 Yvonne Li, Avantage Ventures yli@avantageventures.com

  2. Avantage Ventures To create a sustainable future for everyone in Asia Supports key development sectors in Asia Pacific which address the most pressing challenges and opportunities of our times. Early exposureto investments in socio-economic solutions underpinning Asia’s development long term investments of USD2 to 5 million committed to addressing social & environmental challenges Asia based

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  4. Regional Trends in Asia Key Trends & Rationale Sectors of Impacts • Consumption demand of 4.2bn Asians • Emerging middle-class driven consumptions • Persistent industrialisation and urbanisation • Concerns with food and water security • Sustainable agribusinesses • Recycling facilities • Waste management Ageing Population • Affordable clean energy • Energy efficiency • Water management • Environmental challenges in water, air and ecological conditions • Global imperative to cut greenhouse gas emission • Governments adopt low carbon growth strategy Limited Resources • Elderly homes and residential care services • Training geriatric care workers • Longer lifespan • Falling fertility rates in China • Policy-driven demographic changes (e.g. single child policy in China) Climate Change • Income inequality leading to worsening wealth gap • Large communities are economically left behind • Under-provision of public services for groups at the margin • Special needs education and vocational training • Affordable housing • Employment designed for disenfranchised communities Social Marginalization

  5. Beijing LangLang School

  6. Qingdao Yanguang Elderly Home

  7. Big Tree Farm

  8. Spectrum of Social & Financial Objectives • ESG (environmental, social and governance) is a generic term used in capital markets and used by investors to evaluate corporate behavior and to determine the future financial performance of companies. They are a subset of non financial performance indicators that includes sustainable, ethical and corporate governance issues such as managing the company’s carbon footprint and ensuring there are systems in place to ensure accountability.

  9. DFIs and Impact Investing 9

  10. Development Finance Institutions • Uniquely placed to spur private sector dollars to finance: • Global public goods – climate change remedies/micro energy efficient solutions • Narrowing income divide in frontier countries • Strengthening financially successful social enterprises • Building healthcare and education infrastructure and networks • DFIs can achieve this by: • Changing the risk perception of social enterprises in Asia Pacific by providing “stamp of approval” • Knowledge sharing through linkage programmes • Integrating social enterprises into global supply chains • Leveraging field experience and knowledge of intermediaries to further investment and outreaching to social enterprises who offer sustainable and innovative solutions to social and environmental issues 10

  11. 12 Market Size and Opportunity • JPMorgan November 2010 report classifies impact investing as an emerging asset class globally. Their report looks at impact investing opportunities at BOP and estimates a potential market of $400 billion to $1 trillion. • Avantage Ventures September2011 report estimates aninvestment opportunity ofbetween $52 billion and $158billion within Asia-Pacific’ Refer to ‘Beyond the Margin: Redirecting Asia’s Capitalism’.

  12. Market Size of Impact Investing in Asia Source: Avantage Ventures Analysis 2011

  13. Triple Bottom Line Enhance local communities’ livelihoods Community empowerment Promote sustainable agricultural practices Preserve scarce natural resources Use clean energy and reduce harmful greenhouse gases Social /Environmental Impact Financial Impact • Balance financial returns with social and environmental ones • Grow sustainably • Generate profits to scale impact • Create disposable incomes thereby stimulating vibrant local economies

  14. “If social enterprises are nurtured and their activities and investments allowed to grow both in scope and reach, societies are likely to change their views about how business and investment can be best used for the betterment of the entire population. In this way, investors can directly shape the course of progress in the Asia-Pacific region.” Yvonne Li

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