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ASIA ESG INVESTOR REPORT

Greater global standardisation, more regulatory support and enhanced understanding are vital if wealthy Asian investors are to realise the full potential of ESG-driven investing, according to a new report by Hubbis, supported by Jersey Finance.

The report, Asia’s HNW and UHNW Investors: the Growing Importance of ESG, Impact and Sustainability, explores attitudes towards ESG and sustainability in the Asian wealth market.

Surveying 112 wealth management leaders and decision-makers in Asia, it found rising interest in ESG investing among Asia’s wealthy individuals and families, but education and infrastructure are obstacles. the survey found: • 80% said ESG-driven investing is taking off, with 14% saying it is already a source of significant activity. But 20% said it is tough to gain traction with wealthy private clients. • Within a decade, 85% of equity allocations of HNW/ UHNW Asian investors will be driven by ESG considerations for 25% of all portfolios. • 76% said Millennials and GenZ are most engaged in ESG investing, or will be when they control more of the wealth. • 81% of Asian single family offices are either receptive to the concept of ESG but want to learn more or are awaiting evidence that such investment produces better results. Only 12% of SFOs are driving through such investments. • 23% of respondents said lack of clear regulatory guidance was holding them back, while 21% said too many bodies and standards was a problem. • 51% said global private banks are leading the way in terms of communicating and promoting ESG-driven investing in the Asian market; 29% said boutique international private banks were in a good position.

Joe Moynihan, Chief Executive Officer of Jersey Finance, said: “Private investors are paying increasing attention to ESG criteria, and we’re seeing that clearly being played out among the wealthiest investors in the Asian market.

“However, although there is an appetite to understand more about ESG investing and to allocate more to such investments over the coming decade with the growing input of the next generation, this is a long-term journey.

“For private client investors to take the next step, there must be greater global standardisation, regulatory support, understanding among those private investors, and evidence that this will genuinely help their portfolios outperform as well as mitigate risks.”

GUERNSEY LENDING RULES

The Guernsey Financial Services Commission is seeking feedback on its approach to regulating sectors covered by the Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022.

The law, passed by the States of Guernsey on 14 July, aims to protect customers in the bailiwick who make use of consumer credit in all its forms.

Firms offering or intermediating such services will need to be licensed and regulated. The consultation sets out the scope of the licensing regime and how different sectors will be treated once the regime comes into effect.

Done Deals

Aztec Group has supported Synthesis Capital with the fundraising activities and final close of its first fund, Synthesis Capital Fund I, which was established as a Guernsey Green Fund. Raising more than $300m, the food technology fund will invest in businesses bringing technology solutions to global food system challenges, including meat and protein alternatives. Aztec supported the establishment of the fund and will continue to provide administration and accounting services from its Guernsey office.

Bedell Cristin has acted as British Virgin Islands counsel to Gopher Investments, an investment vehicle that has acquired Finalto, the financial trading division of Playtech, for $250m. The firm supported instructing counsel White & Case on the offshore aspects of the deal, which involved multiple international jurisdictions. Leading Bedell Cristin’s team was Singapore Partner Kristian Wilson, assisted by Jersey Associate Philip Kendall. They advised on the offshore regulatory aspects relating to the deal including obtaining the necessary regulatory approval in the BVI.

TrustQuay has signed a technology agreement with Australian business Equity Trustees. Under the deal, Equity Trustees will centralise its Trustee and Wealth Services (TWS) business – which includes charitable and community trusts, and executor and trustee services for individuals and families – onto TrustQuay NavOne to provide an integrated technology solution across its Australian offices. Equity Trustees will adopt TrustQuay Portal.

Carey Olsen and Highvern have supported Capital Pilot on the launch of Boost Fund I, one of the UK’s first automated highvolume investment funds for high-growth UK startups. Established as a Jersey Private Fund, the fund invests in UK startups. Boost Fund plans to complete 100 equity investments in less than six months. Carey Olsen acted as lead counsel to Capital Pilot on the fund launch, led by Partner Chris Griffin, with assistance from Associate Thomas Bulfin. The firm advised Capital Pilot on all aspects of the fund’s structure and establishment alongside Highvern, which is acting as designated service provider and providing a range of administration services to Boost Fund I.

Apex Group has been appointed by Encore Capital Management to provide fund administration, investor reporting and tax services. Encore is a real estate developer, operator and institutional investment management firm, with in excess of $2bn in assets under management. It has been a longstanding tax compliance and structuring client of tax services provider FTS, whose majority shareholding was acquired by Apex in April. With FTS becoming part of Apex Group, existing clients such as Encore can now access the group’s global, cross-jurisdictional reach and additional services such as fund administration, digital banking, compliance solutions and ESG Ratings and Advisory. n

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MERGERS AND ACQUISITIONS

Apex has completed its acquisition of Sanne, positioning Apex as a top-tier service provider servicing nearly $3trn in assets. Sanne adds 2,500 people into the group and six locations in Denmark, Japan, Serbia, South Africa, Spain and Sweden. Sanne adds product and experience in serving the closed-ended private equity, private debt, capital markets, loan agency and real assets markets, as well as expanding footprint in the US, central Europe, Africa and APAC.

Jersey private equity firm Rialto Investment Partners has acquired Purpose, a bookkeeping, accountancy and tax practice for local owner-managed businesses. Rialto was formed in October 2020 by Luke Smith and Oliver Mourant to acquire highperforming local companies. Rialto’s aim is to create a local pension fund. All staff will stay in the business and Purpose will retain its branding but become a Rialto portfolio company in the same way as Maillard & Co, which Rialto acquired last year.

Jersey-based KIT Consulting has merged with management consultancy Elixirr to become the Jersey branch of the global business – Elixirr Consulting (Jersey). KIT Founder and CEO Emiko Caerlewy-Smith becomes a Partner at Elixirr, while Jane Flemmer and Amy King have joined as Principal and Manager, respectively.

Imperium Trust Company (UK) has completed its acquisition of Page Tax Consulting, a personal tax compliance services business based in Reigate, England. The acquisition bolsters Imperium’s UK offering and adds eight staff to its team, bringing the total in the UK to 17. Page Tax founder Tim Page will remain as a consultant to the business.

Guernsey-based Vega Technology Group launched in July, providing turnkey fintech and regtech software products to international financial services clients. Formed following the merger of Fusion Acusoft and Vega Solutions, the new group will develop its portfolio of products to clients including private banks, wealth management firms, pension and corporate services providers, trust and fund administrators.

Next Generation IT and Alternative Solutions are merging, subject to approval, to form a full-service IT service provider across the Channel Islands. The new firm, Clarity, will be based in Guernsey and will also operate from Jersey and Romania to support clients in the Channel Islands, the UK and further afield. It will be run by an executive team led by Chief Executive Officer Neil Jordan, former MD of Alternative Solutions. n

The law and rules also cover fintech platforms operating crowdfunding and peer-to-peer platforms, as well as virtual asset service providers.

It introduces licensing for a wide range of activities related to crypto. Individuals holding crypto instruments solely for investment purposes will not need to be licensed.

Guernsey is introducing the rules partly to remain compliant with the Financial Action Task Force. The law will replace the Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008, and introduce instead the licensing and regulation of ‘financial firm businesses’. Responses are sought by 15 September.

JERSEY TO BE DRONE TESTBED

Jersey has been chosen as the testbed for a £3.7m project that could lead the way for autonomous flights.

Part of the UK-funded Agile Integrated Airspace System programme, drones will be used to test aircraft guidance technology to make the skies safer. This will enable autonomous unmanned aircraft, improving supply chains and connectivity to the UK and Europe.

UK tech startup Volant Autonomy is leading a ninepartner consortium that includes Ports of Jersey and Digital Jersey. Volant has developed three products enabling safer flight through risk-aware flight planning and increased pilot awareness, and mitigates against airborne collisions. The technology can be used to enhance safety for manned/unmanned aircraft.

Volant is developing the flight guidance technology for use cases such as unmanned logistics aircraft, which could lead to autonomous drones being used at low altitudes to transport items.

JOHNSON TO CHAIR JFA

The Jersey Funds Association (JFA) has elected a new committee, with Michael Johnson (pictured), Group Head of Institutional Services at Crestbridge, taking over as Chairman. Mourant Partner Joel Hernandez takes on the position of Vice Chairman, and Robin Wilson, Sophie Reguengo, Stephanie Hopkins, Clive Spears and John Riva are all joining the committee.

Remaining in post this year are Richard Anthony, Mike Byrne, Steve Cartwright, Ben Dixon, Ben Honeywood, Dilmun Leach, Robert Milner, Tim Morgan, Simon Page, Martin Paul, Tom Powell, Peter Rioda, Ben Robins, Martin Rowley, Sarah Sandiford and Elliot Refson.

Johnson said: “There’s no doubt the landscape continues to pose challenges. Geopolitical developments have significantly worsened since the increased hostilities in Ukraine, and from a macro-economic perspective inflation rates, interest rate changes and other economic indicators are pointing to a significantly more challenging economic environment.

“Jurisdictionally, the competitive environment remains intense and evolving too. But there is plenty for Jersey to be positive about. We have a compelling proposition, an industry growing at an impressive rate and more and more managers of substance looking at Jersey to support their cross-border needs.” n

governance matters

Hannah Luce, Governance Director at TMGA Wealth Management, looks at the importance of ensuring that good governance is woven through every fibre of an organisation

IT IS PERHAPS easy for the true meaning of corporate governance to become lost in the enormity of the ‘governance brand’. The need to define it can often lead us to confine it to a role, a job or a function, at the expense of realising the true extent of its reach.

Corporate governance has long been seen by many as the responsibility of the board alone, with the support of a trusted governance professional to guide and advise them.

However, whilst the importance of the role of a board in implementing effective governance practices cannot be overstated, to be successful, governance must also be embedded into every particle of a business.

THE GOVERNANCE ICEBERG

To use an analogy, corporate governance can perhaps be compared to an iceberg. The first layer is above water; it is clear, unambiguous and visible to those looking for it. In the corporate governance world, this layer would reflect the board function, decision-making, the smooth management of board and committee meetings, and externally, the information that it publishes.

The second layer is just below the water. It is still visible, but less so than the first, and harder to define.

This could refer to the control framework that a business puts in place; how it deals with its clients and other stakeholders; how staff are expected to act, and the measures in place to ensure that its legal and regulatory obligations are met.

While this second layer is unquestionably a key element of an organisation’s framework and is still somewhat visible within the business (and on occasion, outside of it), it is perhaps less of an obvious component of corporate governance.

The third layer of the iceberg is deep below the water – entirely invisible from the surface, but more considerable by far than the rest. This is the governance culture of an organisation; the shared belief in its mission or purpose, and the desire to act ethically and transparently. The ‘lifeblood’ of the organisation.

Without a culture of governance flowing into every task, every interaction, every decision, the top two layers of the iceberg cannot be supported.

GOVERNANCE CULTURE GIVEN ITS PLACE

The emerging acceptance of the importance of a good governance culture was demonstrated in 2018, when the UK Financial Reporting Council updated its UK Corporate Governance Code to include a new requirement for the boards of UK listed companies to “assess and monitor culture”, something that hadn’t been included before then.

When done well, a culture of good governance can support a business in its aims: with the attraction and retention of talented employees leading to unrivalled corporate knowledge; with staff collectively pulling together to drive the business forward, and investors confident in the security of their investment.

However, there is no ‘one size fits all’ solution to creating an effective governance culture, which can take many years to build, and a significantly shorter period to destroy. It must be continually assessed and improved, with the board setting an authentic and consistent tone from the top.

CORPORATE GOVERNANCE AND TMGA

Since the outset, TMGA has been built on strong governance principles. From its team of senior professionals with complementary knowledge and experience and a focus on creating transparent relationships with its stakeholders, to the early creation of a Governance Director role, TMGA has demonstrated its commitment to creating a solid governance culture.

TMGA has also utilised the unique opportunities available to it: the ability to create a robust, yet nimble, investment governance and control framework from the beginning, based on the significant experience of its senior management team and unimpeded by challenges that can come with having to improve established practices.

Put simply, TMGA was able to design its ideal environment from the start, with good governance at the centre.

Just like the metaphorical iceberg, this careful creation of a governance focused culture allows the established investment governance and control framework to operate effectively.

This in turn supports the board in the decisions it makes, all of which are focused on providing investment solutions to clients in a thoughtful and transparent way. n

FURTHER INFORMATION

TMGA Wealth Management is an independent and dynamic wealth management business which delivers investment management solutions via its flagship Discretionary Portfolio Management service.

Hannah Luce has over 20 years’ experience in the financial services industry, across private wealth, corporate services and fund services sectors. Hannah is a qualified Chartered Governance Professional and a member of the International Compliance Association.

To find out how TMGA Wealth Management can support you, please contact our Senior Investment Directors:

Email: michael.caetano@tmgawealth.com tim.sanders@tmgawealth.com greg.powell@tmgawealth.com

Tel: 01534 748740

tmgawealth.com