Successful impact investing by family offices needs high level of collaboration, longer-term mindset
But next-generation leaders are becoming more engaged in family offices’ impact investing journeys
[HONG KONG] Family offices that engage in impact investing can collaborate with more “like-minded” partners to achieve their desired outcomes, said players in the impact investing space at a conference in Hong Kong earlier in September.
Such like-minded partners can include organisations that align with the causes they support, as well as their peer networks, they said at the AVPN Global Conference 2025 held in Hong Kong.
Family offices have emerged as key players and an important source of funds for impact investing.
In an interview with The Business Times, Ann Tan, managing director of the Center for Sustainable Finance and Private Wealth (CSP) Singapore, said: “We are seeing a shift from traditional, reactive cheque-writing towards a more strategic and integrated model, whereby we’re looking at how philanthropy can be a powerful tool within the sustainable finance tool kit.”
The centre she heads conducts training for representatives of family offices looking to implement impact investment strategies.
These family offices deploy capital across asset classes, ranging from philanthropic grants to funds reserved for impact investing, usually defined as investments made to generate positive impact alongside financial return.
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Tan said: “Family offices put in money to fund specific programmes or startups and plough back the returns on investment to fund philanthropic programmes.”
Vikas Arora, chief impact investing and blended finance officer of AVPN, said impact investing has more than US$1.6 trillion in assets under management worldwide, and is growing at a compound annual growth rate exceeding 20 per cent, according to a 2024 report by the Global Impact Investing Network.
Impact investing is characterised by four key factors: additionality, intentionality, measurability and materiality.
To achieve their desired outcomes, these families should have a clear strategy of their investment approach.
Tan said: “(Family offices) are becoming what we call ‘architects of impact’, because they get involved in designing and investing in solutions. They don’t just give money and fund a problem.”
Impact investing requires taking a longer-term mindset. “Family offices put in money like any asset class depending on the time horizon, risk and volatility. If they keep at it long enough, it makes money back. It’s the same rationale as traditional investing, but it has a focus on creating impact for the environment, society and governance.”
Some causes, such as climate change, require a longer time horizon before the impact and outcomes can be evaluated; causes such as healthcare, artificial intelligence and tech have shorter time frames.
“The causes that we see the families undertake are influenced by the family business,” she noted.
Next-generation leaders getting more say
Next-generation leaders in family offices are more involved in impact investing than their predecessors.
Addy Cheng, founder and chief executive of Climate+, a social enterprise seeded by a family office, said: “The younger group – the successors – have inherited funds. I see that this group tends to be more open to impact investing.”
She attributes this partly to their being more aware about environmental and social causes from education efforts, as well as government policies addressing such issues.
“Policies shape investments. Without government policies, people will not be willing to invest because there is no clarity, and they are afraid they’ll lose money,” she said.
In line with this, next-gen leaders are taking more control of their wealth, as relationships with other family members – including the patriarch or matriarch – are “better-managed”, said Kevin Teo, chief technology officer of AVPN and head of ImpactCollab, a platform which engages family offices to deploy philanthropic capital more effectively.
He said: “Ten years ago, the interest from next-gen wealth holders was already there. They were more socially oriented and wanted to give back. What I wasn’t seeing then was their being taken seriously by their parents.”
But he has seen a shift in family relationships: parent-child relationships have “softened”. The younger generation now has more capital to deploy and more power to make decisions.
“It’s very clear that when I’m talking to them this time around, that their parents are actually supportive of their ideas, and they are being given a certain level of leeway to pursue these,” Teo said.
CSP Singapore’s Tan also emphasised the importance of communication within the family structure. Individuals have different attitudes towards wealth, and substantial wealth can involve “emotional turbulence” in the decision-making process.
“We see the challenge where the internal alignment between the individual and family members may not be as clear-cut. When the alignment is not there, the strategy can’t be cast in stone,” she said.
Peer networks and impact measurement
As family offices play a greater role in impact investing, more peer networks have emerged for them to learn from each other – especially because they face similar issues and challenges.
One example is The ImPact, a membership community with more than 90 families co-founded by Justin Rockefeller and Liesel Pritzker Simmons, who hail from the Rockefeller oil giant family and the Pritzker family behind Hyatt, respectively.
Tan said: “Peer networks are very important in this ecosystem for family offices to collaborate, because once they come together, they can openly share their strategies.”
Some networks also include ultra-high-net-worth individuals and social entrepreneurs, presenting more opportunities for collaboration.
Climate+’s Cheng added that “sharing success stories” among such networks encourages more family offices to engage in impact investing.
Another challenge that family offices face when undertaking impact investing is in measuring impact. Many projects do not have clear-cut ways to measure outcomes, especially because qualitative data is involved.
Because every family office is unique and has its own strategy, Tan noted that “there is no one-size-fits-all” approach.
AVPN’s Arora said: “Family offices are looking to allocate a larger portion of capital towards investing… but they’d be happier to do that if their investment can demonstrate the impact it will create.”
Peer networks may be helpful as they can share methods. For example, Happiness Capital – the family office of food firm Lee Kum Kee Group – launched the Happiness Return Framework last year, which assesses how its investments affect the happiness and well-being of stakeholders. The group is keen for other companies to adopt this framework as well, Tan said.
Arora added that AVPN, as a social investors network, is also working on building an ecosystem for family offices and other investors to share what they learned about their journeys.
“(This is so) that investors have a better understanding of how they can quantify the positive impact that their activities are going to generate,” he said.
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