Going green in Asia

Date: 06 Dec 2023

Karen Jones

Citywealth CEO Karen Jones speaks with Simon Hopkins, CEO of Milltrust International, on their unique approach to ESG.

ESG is the theme of the last few years as the Covid period brought into sharp focus many issues that perhaps had not been contemplated with our fast-paced lives. Those issues include climate and climate change. Credible news agencies show polar bears tinkering on thin sheets of ice and emerging economies thrashed with weather devastation. The rise of instant communication through social media and a new generation of child activists has caused a trifecta of consideration on the topic.

The early adopters in finance though, as we now know, did not always behave in the best interest of their clients. Some financial operations saw the opportunity: relabelled, copy and pasted and joined the ESG race to market. What was that race? The race to cater for green investors. The rest has unfolded in ESG history with ‘greenwashing’ as a constant companion in many discussions. Since then, the government has intervened in the UK and new regulations have been brought in to prevent smoke and mirror marketing. 

Fund manager Milltrust International does not fall into the category of bad actor. Simon Hopkins, who is based in Singapore, and his co-founder Alexander Kalis have gone hard on ethics working with the WWF in Hong Kong to create funds that focus on green things, including green food (literally made from peas), health tech (looking at more advanced tests) and has now created templates for ESG operations which are licensed out to banks. Their focus is Asia and this he says this is their USP.

Hopkins explains his funds: “We are the first people to use managed accounts for holding client assets and appointing custodians. Picking and research on geographies is carried out by regional partners.” He continues: “[W]e believe if you control the money, it’s safer.” He says they look at every stock and are a signatory with PRI, which is a UN-supported network of investors promoting sustainable investments. “The advantages of this approach”, he says, is liquidity. “We don’t have to go to anyone else. Our funds are our funds. We hold the money and can return it.”

They are relatively small; their flagship fund is AUM $300mn – The Global Emerging Market Fund (GEMS). Entry point is €100,000 and it’s an Irish, domiciled fund. This is only for accredited investors. Thus, the reason Milltrust has launched East West, a family office atop of their fund business. He says private wealth is growing and estimates there will be $6trn in private hands looking for an investment home. He adds: “Hong Kong and Singapore are bigger than the US and twice as big as Switzerland.”

Their climate fund sits at $15mn, but Hopkins says their win is in the methodology which is sold to other wealth managers and clients. They use it to select companies to invest in. “Every one of our companies must have its revenues from decarbonisation. This is the rule we set with WWF. In addition, our portfolios don’t cross over with any other index or ESG funds.”

Milltrust is funded by the management team and Hopkins says he ploughed the money from his last business into this one. “My objective,” he says, “is to build a business that brings expertise from the West, investment skills and brings our reputation to the asset management business. The Gulf – UAE is a global hub for nomads with business interests and a place to hang their hat with residency, but people don’t want to bank there. We believe they will keep assets in Singapore.” He adds: “Hong Kong has also seen a lot of money move into Singapore.” Milltrust are applying for a licence in Abu Dhabi and have licences in Singapore and London, with nine funds in total.

Of his investments Hopkins says: “Plant based food has claimed 30% of all meat sales in the USA.” In their invested company, he says peas and water go into a high moisture machine which comes out like pasta: “It has a fibrous texture like chicken.” He adds that plant-based food has a problem with a beany bitter taste, but their product has removed that using only natural ingredients. Finishing, Hopkins tells me about a company they backed from Exeter University to evaluate the Covid virus, “the world’s first antibody test.” He says: “The healthcare regulatory body MRHA has approved this and its being rolled out in a number of countries. The company is now putting money into other tests, for instance looking at fatty livers which are a precursor to diabetes.” Hopkins is passionate on his topic and his momentum is heart felt. Let’s hope his vision wins and we can all be assured that the polar bears will still be sitting on the ice oblivious to the future problems surrounding them.

Subscribe to Citywealth Weekly Newsletter to learn more about Private Wealth Management: https://www.citywealthmag.com/weekly-news-email/