Impact investment funds for frontier markets in Southeast Asia: Creating a platform for institutional capital, high-quality foreign direct investment, and proactive policy

Manuel Stagars ()

Journal of Asset Management, 2014, vol. 15, issue 6, No 1, 347-352

Abstract: Abstract Southeast Asian frontier economies, such as Cambodia, Laos, Myanmar and Vietnam, have enjoyed impressive average GDP growth between 6 and 8 per cent since the year 2000. They are catching up on entrepreneurship initiatives and investment policy with emerging markets and promise strong growth in the medium and long term. When investable assets qualify as impact investments, they yield a positive, sustainable benefit for the local population and the environment. This investment style is becoming important for global investors in developed markets who are willing to forgo a small portion of financial returns to make sure companies use their capital for a worthwhile purpose. A blended investment approach combines several asset classes in a portfolio to reduce financial risk. By combining impact investing with a blended approach, frontier market investments may captivate the attention of new sources of capital from high-net-worth individuals and institutions. Next to improved access to finance, high-quality foreign investment has the power to jumpstart a positive feedback loop, which may result in outperformance of projected GDP growth rates, accelerated inclusive growth and improved capacity development. Early investment in clean technology and innovative business opportunities can help develop these markets more effectively, as they offer a clean slate for a sustainable development model.

Keywords: impact investing; socially responsible investing (SRI); frontier market; Southeast Asia; blended investment fund (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1057/jam.2014.35

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