SINGAPORE – THE HUB FOR IMPACT INVESTMENTS

Abstract

Impact investment, as a new form of financial product and service, is slowly gaining traction around the world, especially in the Europe and North America. Cities in Europe and West Africa have prepared proposals and develop new initiatives in order to establish themselves as impact investment hubs. However, the motivation is very much absent in Asia. This study investigates the degree of geographical concentration for impact investment funds in the world today, the perception by stakeholders regarding Singapore’s potential to be the regional impact investment hub for Asia as well as the relationship between development of impact investment hubs and current existence of financial centres. Through examining the relationships between geographical concentrations of traditional financial services and that of impact investment funds, it was found that the Gini-coefficient measuring the relative geographical concentration of impact investments funds is similar with that of the traditional financial services. Financial centres were found to be positively correlated with the development of impact investment hubs. And lastly, Singapore was also found to be perceived favourably by stakeholders as a regional hub for impact investments through primary data research. A case study of Singapore with SWOT analysis on its position in impact investments is performed. It was found that Singapore and Hong Kong are similar to New York City and London for several indicators. As a result, there is a potential for Singapore to be an impact investing hub, but Hong Kong may emerge a strong competitor for the position. The findings of this study have implications on impact investment funds and their future geographic distribution. Consequently, further research is suggested.