Private Wealth — Netting Rich Returns
Not all agree. Jaap van den Ende, head of socially responsible investing at ING Netherlands, says: “Under current market circumstances there is not really a strong demand for anything at the moment, but clearly there is a strong interest in these kinds of products.” He adds that sustainable investments are not inherently riskier than traditional products. “Socially responsible investing provides something extra, but not extra risk.”
Individual investors tend to be more nimble than institutions, which means the financial crisis presents an opportunity for ethical investment firms, says James Gifford of the PRI. He says: “High net worth individuals tend to have the flexibility to change investment strategies more quickly than other market players and often act as trendsetters, so I think increased engagement with them can have big benefits for responsible investment as a whole.”
Yet before investment houses are able to take this opportunity, they will have to bring sustainable investment and relationship managers together in-house. Only then will asset managers – even the ones who publicly state their commitment to responsible investment – be able to tap the rich resource of funds on offer from wealthy individuals.
A moneyed elite
* At the start of 2008, 10.1 million individuals worldwide held at least $1m in financial assets.
* Their combined wealth was $40.7tn, a 9.4% gain on the previous year.
* They each had on average $4m to invest.
* India, China and Brazil had highest growth in numbers of high net worth individuals.
* High net worth financial wealth was projected to reach $59.1tn by 2012, advancing at an annual growth rate of 7.7%.
Source: World Wealth Report 2008, Capgemini and Merrill Lynch