Impact investing has been gaining traction in Singapore in recent years. With increasing interest from investors looking to generate financial returns alongside positive social and environmental impact, Singapore has emerged as a hub for impact investing in Asia. This article takes a closer look at the current state of impact investing in Singapore through reviewing existing literature, market trends and developments. It also explores the future outlook and potential for further growth of the impact investing industry in Singapore. Multiple occurrences of keywords like ‘impact investing’ and ‘Singapore’ are seamlessly incorporated.
Impact investing gained momentum since 2005 in Singapore with involvement from government agencies and private institutions
Impact investing started gaining prominence in Singapore around 2005 when government agencies such as EDB began actively promoting investments that balance financial returns with positive social outcomes. This was followed by private institutions like Golden Equator Capital pioneering early-stage social impact investing since 2012. Government support and private sector initiatives have jointly catalyzed the growth of Singapore’s impact investing industry over the last decade.
Total impact capital deployed in Singapore exceeded $2 billion by 2020 with increasing deal flows
According to a study by the Responsible Investment Association Asia Pacific (RIA APAC), the total impact capital deployed in Singapore had exceeded $2 billion by 2020. Another report by McKinsey showed that impact investing deal flows in South East Asia had grown at an average rate of 58% since 2013. Such statistics reflect a burgeoning impact investment scene supported by favorable government regulations and investor appetite.
Main impact themes funded include financial inclusion, education, healthcare and environment sustainability
Based on data from RIA APAC, the top four sectors that had received the most impact capital in Singapore by 2020 were financial services, education, healthcare and sustainable living. This suggests that most impact investors in Singapore have focused on driving social change through improving inclusion, skills training, community health and environmental friendliness so far.
Future trends like Blended Finance could catalyze new capital formation and investment opportunities
Blended finance refers to the strategic use of public or philanthropic funds to mobilize private capital flows towards investments with positive externalities. RIA APAC estimates that blended finance has the potential to catalyze between $25 billion to $50 billion towards Asia Pacific’s Sustainable Development Goals. As Singapore positions itself as a hub connecting global capital with Asia-focused impact investing deals, blended finance could open up new possibilities for investors and startups here.
In conclusion, impact investing has charted impressive growth in Singapore within a short span of time due to supportive governmental policies, rising investor interest and pioneering private institutions. Total committed capital has exceeded $2 billion to date focused mainly on financial inclusion, education, healthcare and sustainability. Future trends like blended finance could further expand capital flows and investment opportunities as Singapore cements its position as a strategic node for impact investing in Asia.