A Standard Chartered survey conducted between July and August 2020, amongst a panel of the world’s top 300 investment firms with total assets under management (AUM) of more than USD50 trillion*, found that:
The $50-trillion question investigates how some of the world’s largest asset managers – with a combined USD50 trillion in AUM – are investing at this critical time for the global economy and the environment.
The risk posed by emerging markets was flagged as a major barrier to investment. More than two-thirds of investors believe emerging markets are high-risk, compared to 42% who believe the same for developed markets. More than half of the panel (53%) believe returns from investment in Africa are low or extremely low, with almost three in five investors (59%) saying that they are deterred from investing because they lack in-house specialist teams.
In contrast, those already investing in Africa are optimistic about the region, with 93% saying they are likely to increase investment in the future. 54% of Africa investors said their investments had performed as well as – or better than – their developed market investments over the past three years. The figure for emerging markets overall was 88%. However, Covid-19 may have made it even harder for emerging markets to get the investment they need. Some 70% of investors believe the pandemic has widened the capital gap further.
|Which markets are getting the most investment?|
The research points to a growing focus on sustainability, with 81% of investment firms now taking a disciplined approach to environmental, social and governance investment. However, this is not translating into investment in the SDGs. Only 13% of the assets managed by our respondents is directed towards SDG-linked investments. Some 55 % claim the SDGs are not relevant to mainstream investment and 47% say investment in the SDGs is too difficult to measure. However, one-fifth of investors admit that they were not aware of the SDGs. Respondents point to regulatory changes, favourable tax treatment, evidence of higher returns, better data for measuring impact, and increased demand from retail investors as the top five factors that might spur on more SDG investment.
|What are the tools and incentives to encourage SDG investment?|
|Regulation that encourages SDG-linked products||74%|
|Favourable tax treatment of SDG-linked investments||63%|
|More evidence that investing in SDGs will not lead to underperformance||63%|
|Better data to measure the impact of SDG investments||53%|
|Retail investor demand for SDG-themed investments||53%|
Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered said there is still investment gap in Africa to realise the SDGs and this creates an opportunity for us to make a difference where it matters the most.
“A significant surge in private-sector investment – alongside public investment and commitments – will be required to bridge the gap and hit the SDG targets over the next ten years. Right now Covid-19 has made the imperative to act even stronger in the region.”Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered
“There is no single answer to The $50-trillion Question, but it is evident that investors need to expand their focus beyond developed markets. Africa, and emerging markets generally, offers investors a unique opportunity: strong returns combined with the chance to have a significant, positive impact in the long term.”
The $50 Trillion Question study follows the publication of Opportunity2030: The Standard Chartered SDG Investment Map which first revealed the multi-trillion-dollar opportunity for private-sector investors to help achieve the SDGs in emerging markets.
*The $50 Trillion Question Investor Panel is made up of asset managers from the world’s top 300 asset management companies. With combined assets under management (AUM) worth more than USD50 trillion (the equivalent to half of global GDP), how the asset managers in our survey choose to invest will have a huge impact on humanity’s ability to solve some of the world’s biggest problems. This study is based on in-depth interviews with the panel, conducted between July and August 2020.
The below shows the panel broken down by AUM, role and location, all of which ensure it is representative of the global top 300 asset managers.
|The $50-trillion investor panel|
|by AUM||by generalised job role||by location|
|19% are top 10 firms (over USD1 trillion) |
46% are top 11-50 Firms (USD1 trillion to USD350 billion)
23% are top 51-150 firms (USD350 billion to USD90 billion)
12% are top 151-300 firms (USD90 billion to USD20 billion)
|42% fund managers |
17% emerging market specialists
|42% are based in North America |
42% are based in Europe
8% are based in Japan
3% are based in China
5% are based elsewhere