- DBS is anchor investor with USD 10 million commitment; other investors include Tsao Family Office, IMC Group and other leaders in impact-first investing and venture philanthropy
- DBS Foundation conceived of the AIFF to enable others to participate in plugging the funding gap for social enterprises, and serves as the fund’s knowledge partner
DBS and Heritas Capital today announced the successful first close of the Asia Impact First Fund (AIFF), which was launched last August with an investment mandate to support innovative and high-growth social enterprises in the region. The fund has raised over USD 20 million – led by anchor investor DBS, which committed USD 10 million, and like-minded impact-focused family offices, foundations, corporates and high-net-worth individuals including Tsao Family Office, IMC Group, Ishk Tolaram Foundation, ANF Family Office, Mr Pang Sze Khai (Chairman of Octava Foundation and Octava Pte Ltd), and others.
An ‘impact-first’ approach to supporting social enterprises
While working with social enterprises in Asia over the years, DBS Foundation found that the lack of financing options often hindered their growth. It then started exploring solutions to address the funding gap, and at the same time, foster an ecosystem of like-minded investors to help high-potential social enterprises to scale. This led to DBS Foundation’s partnership with Heritas Capital, which designed the AIFF.
The AIFF has a target fund size of USD 50 million and expects to provide catalytic growth capital to 10 to 15 social enterprises in Asia. These social enterprises would have clearly demonstrated social and/or environmental impact in the fund’s impact themes – “Improving Lives and Livelihoods” and “Protecting the Environment” – as well as viable business growth plans to scale their double bottom-line of impact and profitability.
Guided by an impact-first philosophy, the AIFF views returns not only through the lens of financial gain, but also prioritises long-term impact outcomes. This allows the fund to take a patient stance when investing in social enterprises, as compared to traditional financing options which often prioritise short-term profitability metrices. Such patient catalytic capital is key in enabling social enterprises to thrive, considering that businesses pursuing dual bottom-lines require experimentation to develop innovative solutions, and often require a longer time-horizon to fulfil their potential. In a 2019 study by the World Economic Forum, close to half of the social enterprises surveyed cited the lack of consistent access to capital as the primary barrier to scaling their company.
DBS’ anchor investment in the AIFF reflects its commitment to supporting social enterprises that are tackling pertinent social and environmental issues in Asia, and marks the latest in the bank’s longstanding efforts to galvanise capital towards supporting the growth of this space. Since the DBS Foundation’s establishment in 2014, the foundation has provided more than 100 high-potential social enterprises in the region with holistic support aimed at empowering them to grow and scale – this includes disbursing more than SGD 13 million in grant funding to date; providing preferential banking packages; and availing access to a suite of non-financial support measures including capacity-building, mentorship, and networking opportunities.
Karen Ngui, DBS Strategic Marketing and Communications and Board Member of DBS Foundation, said, “As a purpose-driven organisation, we are guided by our commitment to help pave the way towards a better world for generations today and tomorrow. Businesses for impact, which pursue a dual bottom-line of profit and impact and are addressing key societal gaps from a systemic level, play an increasingly important role in this. There’s a heightened need to cultivate a strong ecosystem to support their growth – and through the AIFF, we hope to bring together like-minded partners who share our desire to empower more of these innovative and meaningful businesses, and enable them to thrive, scale, and go on to create greater positive impact.”
With more of DBS Private Bank’s clients expressing interest in being a force for good in society and a willingness to engage in venture philanthropy, the bank also sees the AIFF as a means through which they can contribute impact capital and take an active role in shaping the direction of their giving. This is especially so with the emergence of next-generation business owners and impact investors, many of whom are actively seeking out giving and investment opportunities that align with their values and have a positive impact on society.
“Through AIFF, clients can have peace of mind that their money is going towards a carefully curated and stringent selection of social enterprises that will make the best of it to drive real impact, for the betterment of society,” said Lee Woon Shiu, Group Head of Wealth Planning, Family Office and Insurance Solutions at DBS Private Bank and DBS Foundation Board Member.
The AIFF is managed by Singapore-based impact investment platform Heritas Capital, and is availed to accredited investors. It aims to achieve capital preservation and/or appreciation with a target internal rate of return of 5 to 10%. DBS Foundation serves as its knowledge partner, providing in-depth expertise, a strong track record, and deep networks in its capacity as a leading champion in Asia’s social entrepreneurship scene. The AIFF will also benefit from the deep expertise of its Impact Advisory Panel, which comprise of the following advisors:
· Helge Muenkel, Group Chief Sustainability Officer at DBS Bank;
· Dr Mary Ann Tsao, Chairwoman and Founding Director of the Tsao Foundation;
· Caroline Seow, Co-Founder and Director at B Lab Singapore; and
· Dr Loke Wai Chiong, Clinical Director and Program Lead at MOH Office for Healthcare Transformation.
Chik Wai Chiew, CEO and Executive Director at Heritas Capital, said: “Heritas Capital is pleased to launch and deploy the Asia Impact First Fund, amongst the first of its kind within the impact investment space. We are grateful to like-minded investors such as DBS and the other founding members of the AIFF, who seek to co-create a new impact investment category which prioritises impact over profit. We look forward to raising awareness and shifting consciousness within societies across Asia towards addressing the funding gaps for fast-growing social enterprises that offer innovative solutions for enhancing livelihoods of disadvantaged communities and protecting the environment.”
Quotes from select AIFF first close investors
- “IMC Group as a fourth-generation family business has continually stayed relevant to stakeholders, adding value to humanity and service well-being of life while creating wealth at the same time. We are pleased to co-anchor Heritas’ Asia Impact First Fund for backing leading social enterprises as we further shift consciousness in business to mindfully improve livelihoods and protect the environment in a new era of impact-first investing.’” – Mr Frederick Chavalit Tsao, Chairman, IMC Group
- “Tsao Family Office is glad to support Asia Impact First Fund, an impact-first fund investing to help scale social enterprises that are contributing to the benefit of society and the environment across Asia.” – Bryan Goh, CEO of Tsao Family Office
- “Through our experience in Impact Investment over the years, we have interacted with many social entrepreneurs, and recognise their need for more patient catalytic capital to achieve their full potential. This is where we see impact-first investing coming in, and we are glad to support and work with Asia Impact First Fund whose aim is to help and support social enterprises in their growth.” – Mr Albert Li and Mr Alvin Li, ANF Family Office
- “We have observed that there is a funding gap for social enterprises looking to scale, which limits the size of the meaningful work that they do. With the Asia Impact First Fund, I look forward to working alongside with like-minded impact first investors and venture philanthropists across Asia to support these enterprises.” – Mr Pang Sze Khai, Chairman of Octava Foundation and Octava Pte Ltd
- “At Ishk Tolaram, being impact-driven and collaborative are core to our ethos. This is why we are supporting Asia Impact First Fund in its effort to provide patient catalytic funding to social enterprises which, we have found, is crucial to enabling them to move beyond grant and seed stage capital and grow and scale their impact.” – Divya Patel, Chief Operating Officer at Ishk Tolaram Foundation
- “My interest in philanthropy is very aligned with this new way of giving back to society and the environment through the Asia Impact First Fund, which takes a fresh approach of investing in and growing social enterprises’ capacity to do good in a financially self-sustaining way,” – Ms Varen Chng, C Plus V Foundation