UOB's PE unit issues disclosure statement on impact investing framework

UOB Venture Management (UOBVM), the private equity arm of UOB, on Wednesday issued its disclosure statement on the Operating Principles for Impact Management (Impact Principles).

In a press statement, UOBVM said it is the first signatory of the Impact Principles in South-east Asia to do so.

The Impact Principles - launched at the World Bank Group/International Monetary Fund Spring Meetings in April 2019 - provide a common framework and clear market standards on impact investing, and focus on ensuring that impact considerations are purposefully integrated into key stages of the investment process. It aims to promote greater transparency, credibility and discipline in the impact investing market.

UOBVM said its disclosure statement demonstrates how it upholds the nine Impact Principles through its impact investing strategy and approach, in particular for its impact fund, the Asia Impact Investment Fund (AIIF).

The nine principles include managing UOBVM's strategic impact on a portfolio basis; establishing and documenting its contribution to the achievement of impact; assessing the expected impact of each investment based on a systematic approach; and conducting exits considering the effect on sustained impact, among others.

There are more than 100 signatories to the Impact Principles globally. UOBVM said it was the first - and remains the only financial institution in Singapore - to have signed up.

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Seah Kian Wee, UOBVM chief executive officer, said: "The need for impact investments is even more pressing now with the Covid-19 pandemic disproportionately impacting low-income communities in Asia and pushing more people below the poverty line."

Launched in 2015, AIIF is a double bottom-line fund that aims to achieve both impact and financial returns to institutional and accredited investors globally. The fund invests in high-growth companies from the education, healthcare and agriculture sectors in South-east Asia and China.

It also focuses on investments that will help improve financial inclusion, affordable housing, sanitation, clean energy and water for the region's low-income communities.

"We believe the demand for impact investments will continue to grow and are also reassured that our AIIF portfolio has stayed resilient in the face of the pandemic," said Mr Seah.

He noted that a number of UOBVM's investee companies are achieving higher growth, especially those providing technology-enabled solutions to improve the accessibility of online healthcare and education services for the poor. "This exemplifies that impact investments through private equity can help to advance social development and also to achieve quality financial outcomes."

The second series of AIIF is now open for subscriptions. It has a target fund size range of US$100 million and is expected to make equity investments of about US$1 million to US$15 million per investee company.