Conference Presentation, Fireside Chat
The Sustainable Investing Challenge: Meet the Winning Team and See Their Plan
Milken InstituteConrad Kiechel, Dave Chen, Maoying He, Teng Kai Loh, Felicia Shaw, Annie Donovan, Paul, Richard Matthew
- The Sustainable Investing Challenge is expected to persist in leveraging global student talent, with future proposals anticipated to focus on climate change and coastal threats, while evolving from conceptual projects to implemented solutions similar to past winners like Fresh Coast Capital and Blue Forest.
- Climate change projections indicate a 14% increase in the intensity and magnitude of typhoons in Southeast Asia over the next 50 years, coinciding with a demographic reality where approximately 350 million people in the region will remain in rural areas despite rapid urbanization.
- The SMU team plans to establish the ASEAN Storm Resilience Fund with an estimated startup capital of $1.5 million and an execution timeline of two to three years to define parameters and manage uncertainty.
- The fund targets a projected Internal Rate of Return (IRR) of 11% to 17%, with a base case estimate of 14% to 15%, and is scheduled to begin returning investor capital starting from year three.
- Implementation is designed to source grants from multilateral organizations to subsidize below-market-rate microfinance loans for home reinforcement, leveraging willing and knowledgeable cooperative partners in the Philippines.
- The execution roadmap specifies a phased rollout: a first phase targeting 48,000 houses in Luzon; a second phase expanding to Mindanao and Luzon/Visayas to serve 33 million people and reinforce 1 million homes; and a third phase covering North ASEAN to reach 300 million rural residents with 10 million reinforced houses.
- Operational milestones include forming a program office in the first year, commencing operations in the second year, and evaluating the pilot phase for scaling at the end of year six.
- Industry outlooks suggest impact investing in Asia currently lags behind the West but is expected to leapfrog and accelerate, supported by Singapore's Monetary Authority policy shifts and an increase in ESG-linked debt offerings.
- The team aims to pioneer impact investing within Asian graduate schools and institutional sectors, addressing current difficulties in career opportunities by engaging with regional stakeholders and potentially integrating additional engineering capabilities.