UBS’ rich Asia clients pouring billions into sustainable assets

Core sustainable investments at UBS rose by 62 per cent to US$793 billion (S$1.1 trillion) at the end of last year.
Core sustainable investments at UBS rose by 62 per cent to US$793 billion (S$1.1 trillion) at the end of last year.PHOTO: REUTERS

HONG KONG (BLOOMBERG) – UBS Group’s wealthy Asian clients are pouring billions of dollars into sustainable assets as the region’s swelling ranks of millionaires jump on a global push into socially responsible investing.

Assets under management in fully sustainable discretionary portfolios for Asia-Pacific private banking had jumped to US$4.5 billion (S$6.1 billion) as at the end of June, up from US$1 billion at the start of last year, according to the Swiss bank. Under a discretionary portfolio, rich clients hand over lump sums and let the bank manage the money for a fee. 

There was “a lot of scepticism” on sustainable investing in Asia a couple of years ago, said Mr Adrian Zuercher, head of global asset allocation at the UBS Global Wealth Management Chief Investment Office, at a briefing in Hong Kong.

Now “there is a clear trend that clients here want to align their personal interest with their investment”, he said. 

The pandemic and an accelerating global effort to combat climate change have caused interest in sustainable investing to surge over the past couple of years. The market for products claiming to support social justice and a greener planet is already estimated at US$35 trillion globally, and is likely to exceed US$50 trillion by 2025, according to Bloomberg Intelligence. 

The world’s richest want more feel-good investments from private banks and super-rich families are increasingly including sustainability and ethics in their investment decisions. 

More than 70 per cent of UBS’ private banking clients in Asia selected sustainability-focused components on a recently launched digital platform named My Way, according to the bank. Globally, UBS had more than US$30 billion in fully sustainable discretionary assets under management as at the second quarter. 

Discretionary portfolios make up about 14 per cent of accounts in Asia, lower than about 40 per cent in some markets in Europe, said Mr Mario Knoepfel, executive director of sustainable investing advisory for the Asia-Pacific, at the briefing. For private banks, a discretionary mandate is a more lucrative proposition than having customers pay per trade. 

Core sustainable investments at UBS rose by 62 per cent to US$793 billion at the end of last year, making up almost 20 per cent of all client invested assets.