For six years now, DBS Private Bank has been running the Future Leaders programme for the children of its private wealth clients. Aged between 18 and 25, participants come from all over Asia as well as Europe and the Middle East.
Among the attendees this year is 28-year-old Alvin Li, a second-generation private banking client of DBS. He is the co-founder and head of sales at the Kommon Goods, an eco-friendly lifestyle brand producing metal straws, bamboo toothbrushes and other non-plastic products
Li founded a Ghana microfinance project after completing the executive programme for impact investing at the University of Oxford, and was later the director of finance at a UK-based charity and analyst at UBS Bank.
In an interview with Citywire Asia, the millennial investor discusses how his sense of social responsibility informs his investment strategies, and much more.
Are you saving more than investing?
In my view, investing is a form of saving. It’s about actively setting aside a set amount and committing to growing the pool over time. I prefer the concept of investing, because when investing in a businesses, you’re actually investing in people, in livelihoods and more generally in humanity.
Where are you investing?
Over the recent years, I have divested away from industries that are generally harmful or unethical, though I understand this may be totally subjective and dependent on personal preferences. For example, I don’t invest in tobacco, oil and gas, or fast fashion due to their end products, environmental side effects and supply chain operations.
I prefer to invest in innovative companies that not only provide employment or economic benefits, but also have a positive impact on society or the environment. For example, I invest in sectors like renewable energy and health technology that have long-term positive impact.
It is rather difficult to convince my father who has been in a traditional industry like finance to do things in a millennial-minded and disruptive way.
Is social responsibility a must-have factor in all your investments?
At least some form of social responsibility must be built into any business that I invest. I look for social responsibility that can take many forms, including ethical supply chains, inclusive employment policies like gender equality and LGBT-friendly policies, and profit donation pledges.
Do your impact investments give you good returns?
From a risk-adjusted point of view, our impact investments have given great financial returns. For example, taking into account currency risks, our microfinance investments in Ghana have successfully returned expected returns and served thousands of local micro-entrepreneurs.
Thanks to capacity building organisations, impact investment deals have indeed grown so much over the past ten years in business acumen, corporate governance, operational excellence and social impact measurement.
More importantly, our impact investments have returned fantastic social returns that have directly contributed to poverty reduction and improved health outcomes.
What challenges do you face today in terms of career and succession in your family business?
One of the key challenges is integrating progressive values and practices into traditional businesses. For example, it is rather difficult to convince my father who has been in a traditional industry like finance to do things in a millennial-minded and disruptive way.
It is a constant process of educating decision makers, advocating for change and implementing structural and mind-set changes. That’s also why I chose to start my own social enterprise start-ups, Givo and The Kommon Goods.
Through entrepreneurship, I get to decide how exactly I want to implement ethical, social and environmental practices in my businesses. It’s an uphill climb, but I’ve got to keep fighting the good fight.
Our microfinance investments in Ghana have successfully returned expected returns and served thousands of local micro-entrepreneurs.
What have been your biggest financial mistakes?
In the earlier stages of my impact investing journey, I may have been overly excited and optimistic about the potential positive social impact, and subsequently dived too quickly into some investment opportunities, whereas I should have spent more time analysing the businesses in a financially more rigorous manner.
I’ve learnt to become more objective and unbiased when looking at impact investment opportunities. I now spend much more time analysing market demand, legal structure, financing terms and corporate governance.
Are you part of a group that connects like-minded individuals?
I’m part of NEXUS, a global group of philanthropists, impact investors and social entrepreneurs. NEXUS members lead disruptive and innovative ventures that change lives and communities both on a local and global scale, tackling a wide range of issues like climate change, modern slavery and gender equality.
I’m also president of a social impact leaders group at a global investment bank, where we host quarterly events, workshops and site visits for fellow social change makers in the Asia Pacific region.
These groups provide a safe space and support system for us to connect with new and old friends who have very different backgrounds but similar social missions.