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  • Writer's pictureImpact Investing Network

The Continuum of Capital in Asia

AVPN, June 2018: Click here to read the report.

This paper outlines approaches and practices funders and intermediaries in Asia adopt to generate impact as well as key emerging trends in the Asian social economy. The findings highlight opportunities that stakeholders could leverage on, and challenges that need to be addressed to catalyse an effective Continuum of Capital for SPOs throughout their growth stages.


The current landscape of social investment practices in Asia presents some key opportunities for growth.

Overall, there is a convergence in impact behaviour as impact funds are broadening their impact areas and corporates have become increasingly sophisticated in their impact strategies. Intermediaries aim to increase impact across silos by filling gaps with their technical expertise and local knowledge. This presents an important opportunity for cross-sector collaboration as different stakeholders can bring in their strengths and expertise towards common social and environmental goals.

Funding sources for impact are increasingly diverse. Foundations register the most diversified sources of funding, while impact funds have begun to attract institutional investors. There is a blurring of lines as foundations and impact funds invest in various models and growth stages, indicating they are defying ‘labels.’ This in turn enhances the synergies between different groups of funders. Funders do not see themselves as facing impact- finance trade-off. At the same time, some impact funds are moving closer to mainstream commercial investment in terms of financial return expectations. This shows that clearer segmentation of funders

is taking shape in Asia, which allows for better identification of potential partners as well as a more effective Continuum of Capital as SPOs seek to diversify their funding.


However, several challenges need to be overcome.

While we are seeing encouraging developments across Asia, the more developed social economies are making faster strides than the less developed ones. For instance, impact funds in Japan, Hong Kong and South Korea seem to have more success in terms of crowding in institutional investors than those in other Asian markets. Large-scale ecosystem building is also implemented in pockets such as Japan, China and India. Southeast Asia (except for Singapore) appears to be lagging behind.

Furthermore, weak pipelines remain a key issue in many social economies, especially in South and Southeast Asia. The majority of enterprises in these regions are years away from the investment-ready stage and therefore need a lot of non-financial support.4 Debt financing might play an important role in fostering these enterprises but is still under-utilised.

Impact measurement still has room to develop across Asia. Without rigorous impact measurement, impact will not be effectively managed. Yet, funders and intermediaries still assess their impact at the SPO level; very few look at the beneficiary level.


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