Client Demand Drives Morgan Stanley To Add Impact Investing Portfolios

Morgan Stanley, which recently set a goal of attracting $10 billion of client assets to sustainable investing products over the next five years, has launched two new portfolios focused on impact investing for its wealth management clients, according to Bloomberg.

Last November, it set up the Morgan Stanley Institute for Sustainable Investing to help attract clients to it impact investing portfolios.

Morgan Stanley has seen steady growth in client demand from both retail and instutional clients for impact investing strategies, according to Audrey Choi, head of Morgan Stanley’s global sustainable finance group, in a Huffington Post interview.

Morgan Stanley’s new balanced portfolio has a minimum investment of $750,000, while the equity portfolio has a $400,000 minimum. The portfolios are predominantly invested in small cap growth companies, said Chad Graves, who oversees the firm’s impact investing for wealth management.

The firm currently has $3.5 billion in more than 100 products aimed at providing social benefits along with financial returns.

Morgan Stanley has been offering its “Investing with Impact” platform with an Environmental, Governance, and Social (ESG) focus for two years. These products include private equity and debt funds that invest in private companies that have a goal of effecting “positive social or environmental change” as well as investments that focus on “emerging consumers” and renewable energy projects.

At the annual SOCAP conference in San Francisco two weeks ago, John Tobin, Managing Director and Global Head of Sustainability at Credit Suisse, described how the firm is seeing huge interest in “environmental products with social impact” from family offices. He pointed out that a big trend he sees in today’s high net worth investors, that separates them from prior generations, is that these new investors are aligning their “values with their investments.”

And in late 2013, Goldman Sachs started raising a $250 million “social impact fund” to invest in affordable housing, education, healthcare, and job creation for disadvantaged communities, as well as in “social impact bonds” can be used to invest in water and clean energy projects. It claims that its fund will be the first that allows companies and high net worth individuals to invest directly in a portfolio of private projects.

To read the full Bloomberg article, click here

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