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Mainstream Impact Investment: A Sea Change in the Market

By News, United Kingdom No Comments

Businesses that set out to minimise the negative impacts of their activities on the community, our society and on the environment at large are better equipped to be successful in the long term; actively structured to meet the demands of an increasingly social market without compromising on their capacity for commercial success. Indeed, these businesses are better able to succeed commercially precisely because they are responsive to this wider social setting.

That was the conclusion reached by last month’s report from the influential research team at Mckinsey which found that more than a quarter of assets now under management globally are being invested on the premise that environmental, social, and governance issues can significantly impact on a company’s long term performance; and given companies which embrace that same cultural mindset will usually perform better in the long term, that should all point to better short term investor returns too as well as a much more robust and resilient share price.

So it isn’t altogether surprising that the market at large is now starting to sit up and take notice of Mainstream Impact Investment strategies; the same strategies which have been at the heart of portfolio management at Red Ribbon Asset Management since the company was founded more than a decade ago.

Major global institutional investors adopting impact investment strategies include the Government Pension Investment Fund of Japan (the world’s largest, with AUM of over $1.1 Trillion), Norway’s Government Pension Fund Global and ABP, the Dutch State Pension Fund (which is the second largest in Europe). As the Mckinsey Report also points out, these behemoths of the investment world are not just switching course for ethical reasons alone: they are pursuing “a conventional investment aim of maximizing risk-adjusted returns”.

And the Report goes on: “…Sustainable investing has become a large and fast-growing major market segment. According to the Global Sustainable Investment Alliance, at the start of 2016, sustainable investments constituted 26 percent of assets that are professionally managed in Asia, Australia and New Zealand, Canada, Europe, and the United States ($22.89 trillion in total). Four years earlier, they were 21.5 percent of assets”.

As though to make that point good, the Government Investment Fund of Japan announced in July this year that it had selected three sustainability indices as future reference points for its passive investment in Japanese equities; and for its part, ABP had already announced that it would include as part of its cross portfolio investment criteria a reduction of carbon-emissions by 2020 of 25% as well as a commitment to invest at least €5 billion in renewable energy by the same date.

These trends are not just straws in the wind. They are all clear pointers to the future, supporting the new paradigm of Mainstream Impact Investment. And of course, the flip side is important too. Mainstream businesses that calibrate their activities so as to reduce their negative impacts on the community, society and the wider environment will also provide a long term, viable basis from which all three segments can flourish. It is the difference between a one off, short-term social project and an entirely new paradigm for society.

It is that important.

Red Ribbon CEO, Suchit Punnose said:

The influential research team at Mckinsey produced a major new report last month which found long term performance to be significantly affected by good environmental and social market performance, as well as a company’s capacity to deliver effective governance in both fields; and companies that perform well in the long term will usually do better in the short term too, which means compliance with all three criteria is likely to deliver better investor returns and a more robust share price for the company in the short term too. So its not altogether surprising that the market at large is now starting to sit up and take notice of Mainstream Impact Investment strategies; the same strategies which have been at the heart of portfolio management at Red Ribbon Asset Management since the company was founded more than a decade ago.

Read the Mckinsey Report here: https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/from-why-to-why-not-sustainable-investing-as-the-new-normal?cid=other-eml-alt-mip-mck-oth-1710

Read more about Mainstream Impact Investment here: reports.weforum.org/impact-investment/

Read about Red Ribbon Fund Management here: https://redribbon.co/

Thermal Power Generation: a drain on India’s resources

By India, News No Comments

Electricity consumption in India is currently less than a quarter of the world average, but that figure is expected to grow sharply over coming years given the subcontinent is not only the fastest growing large economy in the world but is also projected to be the most populous by 2022 (a mere five years from now); and India’s rapidly expanding population is also becoming increasingly urbanised, which will accelerate the pace of demand for power generation still further.

And all of this will also have a critical if widely underappreciated, impact on another of India’s equally precious resources: water.

Thermal Power Generation on the subcontinent is currently consuming India’s already scarce water resources at an alarming rate, and this voracious appetite for water is projected to rise by something between 4% – 6% each year between 2015 and 2050 according to the Council on Energy, Environment and Water (CCEW). This upwards trend will create potentially catastrophic stress levels on existing water supplies and associated infrastructure across the country, as if those pressures were not bad enough already as graphically illustrated by this summer’s droughts in Mysore and the coastal areas of Karnataka, Kerala and Tamil Nadu.

So what is Prime Minister Modi’s Government doing about it?

Well, at a prosaic level, the first thing to understand is the technology involved: there are two principal types of cooling technologies currently in use across India’s thermal power plants, so-called “once-through cooling” (or OTC) and Cooling Tower Installation (CT); although there is a third type, dry cooling, which eliminates the need for water withdrawals altogether, this has proved extremely costly in practice in addition to which it radically decreases plant efficiency, so is not presently regarded by the sector  as a viable alternative either to OTC or CT technologies.

The Ministry of Environment and Climate Change announced in 2015 that all new thermal power plants on the subcontinent would adopt CT technology and all existing plants will convert to CT technology by July 2020 at the latest which will lead to a gradual phasing out of OTC technology within the next three years.

That Policy will certainly have a positive and significant impact on overall water usage in the short term: if only because OTC technology is so much more water hungry than its CT counterpart, but the CCEW Report ominously concludes that sooner or later thermal power plants will become a “challenging” factor in an evolving pattern of increasing domestic water scarcity because the hard reality is that  CT will always be a heavy net consumer of water even if its appetite is less than OTC. Characterising the environmental consequences of a potentially catastrophic water shortage as “challenging’ might, indeed, be read as something of an understatement in those circumstances.

So what else can be done?

Well here’s the good news: India is now the leading player internationally in emission mitigation policies (particularly after President Trump’s decision to withdraw the United States from the Paris Climate Accords) and these policies (especially when set in the context of political imperatives on the subcontinent) have been framed not only in terms of sustainable development, but also to accommodate critical issues of energy access and in particular access for India’s rural poor; all of which inevitably comes down to the key question of Energy Mix. According to the CCEW Report, solar energy will form an increasingly larger part of that crucial mix in India, such that by 2050 62% of electricity generation will be solar based. And CCEW’s reasons for reaching that conclusion are not only that solar energy, but renewable energy as well will be so much cheaper to produce than thermal power (particularly in India with its advantageous geographic conditions), and they are also so much more accessible for the wider population than their fossil fuel brother.

And unlike thermal based power generation, alternative power consumes no water at all.

As TS Eliot might (almost) have put it, “you have the scene, the answer will seem to suggest itself.”

Red Ribbon Asset Management is at the cutting edge of innovative Mainstream Impact Investment strategies which look to this delicate and evolving balance between business, the community and the wider environment when setting its successful investment strategies; a business that responds effectively to its community stakeholders and the environment so as to get that balance right will be much more likely to succeed in the long term. And that’s not only good for business; it’s good for investors and it’s good for the environment as well.

Read about the Council on Energy, Environment and Water Report here: ceew.in/

Read about the Ministry for Environment and Climate Change Notice of 2015 here: envfor.nic.in/

Read about Mainstream Impact Investment Strategies here: http://www.redribbon.gi

Beating a path to its door: the Growth of India’s International Markets

By India, News No Comments

David Ricardo, the father of British Economics, wrote in 1817 that it was impossible for capital to be invested abroad. Herbert Spencer begged to differ forty years later:  “Look at the European continent. All European capitals have light because a British gas company provides them with gas…you say that the Germans are far ahead of Great Britain. But look at Germany. Even Berlin, the capital of the German Reich, would be in the dark if a British gas company had not invaded the country and lighted the streets.” David Davies might take a note of that when he sits down with Michel Barnier again next month.

But of course, times have changed since David Ricardo. The great economist was right about so much, but he was fundamentally wrong about international markets and today’s world marches to the beat of a very different drum. Overseas investment matters enormously, adding to the vitality and vibrancy of any economy, which is why Japanese Prime Minister Abe’s visit to India last month was so important (sandwiched in just before his surprise re-election campaign). For the past decade and a half, Japanese investment has played a hugely significant part in shaping India’s economic success story: more than $25 Billion has been invested into the subcontinent by Japanese Corporations in the last seven years alone. Japan is also the third largest external investor in India, projected to spend $35 Billion over the next three years, in addition to which its Government has tasked the Mizuho Financial Group with seeking out new investment opportunities with the object of reinvigorating future spending programmes.

The relationship is that important to both countries.

Abe met Prime Minister Modi on his trip last month and laid the foundation stone for the new Mumbai to Ahmedabad Bullet Train which comes hard on the heels of works commencing on Phase 1 of the Delhi Metro System (also involving huge Japanese investment) and that in turn followed the huge Delhi-Mumbai Industrial Corridor Project which began more than a decade ago: all of them underscoring the sheer scale of Japanese involvement in India’s infrastructure programmes.

And these are precisely the sort of outward looking initiatives that have come to characterise the Indian Government’s investment strategies over recent years, helping to turbocharge its economy through a succession of eye wateringly large infrastructure projects which have helped turn the subcontinent into the most significant Growth Market in the world with foreign exchange reserves rising to a giddy $400 Billion this year and inflation seemingly pegged at 2%. No wonder the world is beating a path to its door.

Since the company was founded more than a decade ago, Red Ribbon Asset Management has always placed India at the very heart of its investment strategies, at the very heart of its investment strategies which aim to deliver above market rate returns above market rate returns for its investors in one of the world’s most exciting markets.

Read about Mizuho Bank in India here

Read about the Mumbai to Ahmedabad Bullet Train Project here

 

Lighting Up the Skies and Caring for the Earth: Diwali 2017

By India, News No Comments

For a full twenty days before Diwali is celebrated each year, effigies of Ravana are set on fire all over India and across the world, igniting not only the annual Dusshera celebrations but also a shopping frenzy that can make the most Christmas congested stores in London look like a village fete. And every year these Diwali celebrations seem to get more and more extravagant, but it is fair to say that few of them could bear serious comparison with the particular brand of extravagance being coined annually by Savjibhai Dholakia in India.

Mr Dholakia is a diamond tycoon, running an export business in the thriving city of Surat and this Diwali, just as he has done for the past five years, he will be giving away hundreds of cars and apartments to his employees: 1,260 cars and 400 apartments to be precise. And for those of his unlucky employees who fail to get either, there are consolation gifts in the form of gold and diamond jewellery (as you might expect, given Mr Dholakia’s line of work).

Savjibhai Dholakia’s ambition is to give every member of his company a new home and a new car before the next five years are out, and it comes with a price tag of $7 Million a year for the company. Nice work if you can get it…. and it certainly makes a change from the box of sweets most employees can expect to receive at this time of year.

But whilst it is certainly true that Diwali gifts have become increasingly extravagant and exuberant over the years (as you might expect in this, the fastest growing large economy in the world), the unwelcome fact is that celebrations on a great day are starting to take an increased toll on the subcontinent’s environment as well.

As we noted on this site last year, there is growing concern about increased air pollution caused by the enormous number of fireworks being set off above major conurbations in India at this time of year: serious health issues have been attributed to the presence of a heavier than average accumulation of particulate air matter both on the day of Diwali and over successive days. This, together with other environmental concerns, have led to interested groups across the subcontinent to come forward to suggest more eco-friendly ways of celebrating Diwali and here, for what they are worth, are the top tips as we approach 19th October:

  • Buy eco-friendly firecrackers, made from recycled paper and, if possible, those which produce less smoke than light: noise limited firecrackers (with a 125 – 145-decibel limit) are specifically made to produce much more light for your buck, so check the label;
  • Consider using earthen lamps rather than their electrified versions (which are usually made of non-recyclable plastic and consume a lot more power: earthen lamps can be recycled, and they look more attractive too;
  • Use natural organic colours, flowers or cereals when making traditional Rangoli Designs (instead of shop bought, chemical-based variants).

But most of all, however you choose to celebrate the great day, have a wonderful time.

Happy Diwali from everybody at Red Ribbon!

 

“A Goldmine of Opportunity Waiting to be Tapped”: Eco Tourism in India

By India, News 2 Comments

The Indian Government publishes an annual Economic Survey on trends and market conditions on the subcontinent and the Finance Minister last month tabled the latest of these before Parliament. For the first time, it is the second such report to be published within a year, perhaps reflecting the current dizzying pace of economic change across India, the fastest growing large economy in the world. And the second part of the 2017 Survey has some interesting things to say about the future of Indian Tourism, and Indian Eco Tourism in particular.

The Survey reports that Tourism and Hospitality together account for a healthy 9% of GDP in India, generating $117.7 billion last year and expected to climb to $418.9 billion by 2022. Foreign exchange earnings derived from tourism in 2016 amounted to $22.9 billion (8.8% more than the equivalent 2015 figure). Tourism and Hospitality is, in the words of the Economic Survey: “…a goldmine of opportunity waiting to be tappedIndia continues to charm international tourists with its vast cultural and natural resources.”

The Government has certainly not been slow to encourage tourist growth with a series of innovative policies such as the e-Visa programme (which now covers 161 countries): the system is a marked improvement on the old and notoriously inefficient paper-based process, with a total of no less than 1,079,696 e-Visa holders visiting India during 2016: 142.5% of the 2015 figure. But look back at those numbers from the Economic Survey again: overseas earnings, to which initiatives like the e-Visa system are directed, account for less than a quarter of the overall revenue in the sector. The rest is made up of business and domestic travel. What is the Government doing to promote that part of the goldmine?

That’s where Eco Tourism comes in.

According to this year’s Green Lodging Trends Report domestic and business travellers are more and more choosing their hotel accommodation by reference to its green credentials, and the report comes to three particularly striking findings on the basis of an extensive survey of leading hotels:

  • Offsetting carbon consumption to achieve emission reductions is an increasingly important factor with hotel guests as well as with businesses (likely to be paying for their stay): “the topic is hitting home more than ever”;
  • The majority of travellers (business and recreational) actively prefer eco-friendly destinations and are prepared to pay more to get them;
  • When asked: “to what degree does climate change drive you to make operational improvements and investments”, 84% of hoteliers responded that it did and 40% said that it had a “significant impact”, an increase of 12% from last year (in itself an expression of the practical, operational impact of the first two (consumer driven) points made above.

Eco Hotels is the world’s first carbon-neutral hotel brand, supporting sustainable living without compromising on standards of hospitality; and it is a model for sustainable hospitality projects on the subcontinent. Red Ribbon Asset Management is the founding investor in EcoLodge, a key Eco Hotels brand. Having started in 2012 from its flagship Hotel in Cochin, Eco Lodge is now well on the way to rolling out its target of 10,000 eco friendly rooms in India by 2020; and given the trends signaled in this month’s Economic Survey, the brand seems certain to remain at the vanguard of this paradigm shift in the sector.

Read the latest Indian Economic Survey here: indiabudget.nic.in/survey.asp

Read the Green Lodging Trends Report here: www.greenlodgingnews.com/green-lodging-survey/

Read about EcoHotels and EcoLodge here: www.theeco.com/about_us.php

Private Equity and Indian Real Estate: The Bigger Picture

By India, News One Comment

Private Equity and Indian Real Estate: The Bigger Picture

Stag Investors buy into the “grey market” before a Listing takes place, selling out immediately after the stock is traded in the hope the pre-market has understated the share price. The Stag Investor is the Mayfly of the Financial Markets; here and gone in a moment, paying little if any attention to the actual performance of the company in which he was so briefly a shareholder. Private Equity (PE) sits at the other end of the spectrum: investing for the long run, often taking a controlling position on the board and shaping the company’s future in the hope of long-term gains. If the Stag Investor is our Mayfly, Private Equity is more of a Galapagos Tortoise.

So it is interesting that Private Equity Investment has now emerged as one of the cornerstones of the resurgent Real Estate Sector in India. At the very least it speaks well for the Sector’s long-term prospects.

More or less stagnant up to 2014, the PE contribution to Real Estate on the subcontinent has rocketed in recent years (according to Knight Frank’s latest sector report) and is likely to end the year on a record-breaking high of $4 Billion.

Blackstone, a leading Private Equity House, is now one of the largest landlords of office space in India with its recent deals (struck with L&T Seawood and K. Raheja) racking up more than USD 200 Million each; and in overall terms the cumulative PE investment for the first nine months of this year already exceeds the last five years taken together. As Knight Frank note in their report, somewhat archly, “institutional investors have already smelled the coffee”.

Between 2011 and 2014 the average aggregate PE investment in Indian Real Estate was $ 2.1 Billion; that figure rose to $3.3 Billion between 2011 and 2014 (an increase of more than 57%) and the bulk of it was destined for pre-leased office space and industrial properties, which is suggestive (“strongly suggestive” Knight Frank believe) of a trend for new investors to shy away from the risks traditionally associated with execution, regulatory approval and marketing on more conventional “off plan” projects in the residential sector; all of  which suggests that the business and residential segments of the sector are running on different tracks.

But not so fast. That might also give us a clue for one of the key drivers behind the general resurgence of PE interest in Indian Real Estate since 2014, as well as a pointer for the way ahead.

2014 was, of course, the year that Prime Minister Modi’s Government instituted its radical reform programme for the economy; a programme that came to include the Real Estate (Regulation and Development) Act of 2016 (RERA) and a new regime for REIT listings on the Bombay Stock Exchange, culminating in this year’s Goods and Services Tax all of which have combined to turbocharge real estate investment in this, the fastest growing large economy on the planet. So it seems unlikely that the residential sector will continue to lag behind in the manner it has over the past three years. All suggestions are that the two segments of the sector will start to converge.

The Red Ribbon Real Estate Fund aims to deliver income and capital growth in the medium to long term by investing in real estate projects, and Indian real estate in particular; and unlike almost every other real estate fund it is open-ended, enabling investors to exit on notice after the initial three-year lock-in period rather than have their capital tied down for the long term on a conventional private equity model. The Red Ribbon RE Fund offers a unique blend of long-term growth potential with medium-term liquidity.

Read about Knight Frank Report here: www.knightfrank.co.uk/research

Read about the Red Ribbon Real Estate Fund here: https://redribbon.co/investment-products/funds/real-estate-fund/

 

Consumer spending as an engine for Growth

By India, News One Comment

India is currently the fastest growing large economy in the world, which is one of the reasons why projects with their roots in the subcontinent are at the heart of Red Ribbon’s Mainstream Impact Investment Strategies, just as they were when the company was founded more than a decade ago. But what are the key drivers of this explosive growth; what is it that makes India one of the most important Growth Markets in the world and what does all that mean for the future?

Well, for a start demographic trends and the resulting rapid shifts in consumer demand patterns are undoubtedly contributing to the phenomenon.

India has the fastest growing population in the world; increasingly urbanised and sophisticated in its tastes and with burgeoning disposable income levels to match. The resulting escalation in demand is being targeted in particular on social media and technology sectors where according to the Government sponsored India Brand Equity Foundation, spending is projected to double by 2025.

And bear in mind also that these trends are by no means coming off a cold start. By the end of 2016, India had already hit a ten-year high in consumer spending, standing first in a group of sixty-three leading nations surveyed in the Global Consumer Confidence Index. Seventy percent of respondents on the subcontinent responded to this survey by saying that the next twelve months would be a good time for them to buy consumer goods.

The Indian Consumer Sector grew at an annual rate of 5.7% between 2005 and 2015. Compare that with the 12% year on year growth it is experiencing now: and if things continue at the current rate, India will be the third largest consumer market in the world by 2025. By way of only one example, smartphone sales in India are projected to grow by 15% (to 125 Million) during the course of 2017 alone.

Major multinationals have not been slow to spot the trend:

  • Amazon India has set up seven new warehouses this year, which will exclusively provide logistical support for its campaign to boost sales of high-end consumer products and the global behemoth is also planning to enter the Indian food retailing sector by investing US$ 515 million over the next five years;
  • Dyson, the UK-based manufacturer, has plans to enter the Indian consumer market during 2017 and is investing GBP 154 million (US$ 190 million) over the next five years in retail infrastructure.

Prime Minister Modi’s Government is also playing a part in these trends through a policy of 100% Foreign Direct Investment (FDI) relief for online retail goods and services  There is no sign that the pace of change in the consumer sector is likely to slow down anytime soon.

Red Ribbon Asset Management has long recognized the importance of India as the single most significant Growth Market in the World. The subcontinent sits at the very heart of its investment policies, combining above market rate returns for its investors whilst at the same time offering unique opportunities to further the company’s innovative Mainstream Impact Investment Strategies.

Read about the India Brand Equity Foundation here: https://www.ibef.org/

Read about the Global Consumer Confidence Index here: https://data.oecd.org/leadind/consumer-confidence-index-cci.htm

Read the details of India’s FDI Scheme here: dipp.nic.in/foreign-direct-investment/foreign-direct-investment-policy

Sustainability On The Subcontinent: Making It Happen

By Archive, India, News No Comments

In 2014 the World Bank reported that environmental factors including air and water pollution, deforestation and natural disasters were costing India more than $80 Billion a year (just over 6% of its GDP). In addition to the human tragedy involved, that is something we would do well to remember particularly bearing in mind the severe flooding in the Northern Indian States at the moment. If nothing else it demonstrates the inescapable connectivity between the wider economy, local communities and the environment: a dynamic which sits at the very heart of Red Ribbon’s Mainstream Impact Investment Strategies for its Indian Market Portfolio.

But, of course, ongoing issues of poverty and rural poverty, in particular, have inevitably attracted more attention from Prime Minister Modi’s Government outside the prism of specific natural disasters such as those presently being experienced. In 2012, for example, just 36% of India’s population had access to rudimentary sanitation facilities.

For this reason, much of the discussion on sustainability in India has tended to focus on improving social inclusiveness; bringing the population at large and the rural population in particular up to a common standard. That ideology is certainly at the heart of recent Government initiatives on Green Energy Generation where a key focus was the need to bring sustainable, reliable electricity supplies to India’s rural poor for the first time.

In 2014 the Indian Government also launched the Swachh Bharat (or Clean India) Campaign as part of a five-year effort to improve sanitation on the Ganges and other heavily polluted rivers with the aim of making India clean by 2019 and both Domestic and Multinational Companies have proved important partners in delivering sufficient traction for the Project.

There’s a particular fiscal reason for that as well.

In 2013 India became the first country in the world to introduce a mandatory Corporate Social Responsibility programmes (CSR) which requires some 8,000 companies doing business in India to invest at least 2% of their annual profits in CSR initiatives; and as a result of that programme more than $2 Billion a year is now being invested in poverty reduction programmes as well as social and environmental initiatives The legislation also requires companies to make the relevant investment, wherever possible, in their local communities.

All of which is, of course, admirable and the resulting investment is certainly working its slow way into the roots of the Indian Economy, but is this really what we mean when we talk about investing in sustainable projects? All too often, fiscal incentives of this kind can give rise to a tick box mentality at an executive level, treating sustainability as just another (necessary) cost of corporate compliance. But it can be so much more than that. Profound and resilient long-term change is much more likely to be achieved by decoupling economic growth from it’s “adverse social and environmental consequences”; favouring investment in businesses that do not regard sustainability as a compliance exercise, but as a means of securing a competitive advantage, a resilient business and long-term financial sustainability”

That’s what Mainstream Impact Investment is all about.

Mainstream Impact Investment Strategies recognize the importance of the delicate balance between communities, the wider society and the environment at large; driving effective sustainability by tapping into mainstream market economics and delivering long-term, resilient change in the process; not just by way of one-off projects that are fiscally attractive in the short term. That is why Red Ribbon Asset Management has placed Mainstream Impact Investment Strategies at the centre of its Portfolio Management Policies. Delivering above market rate returns as well as sustainable, positive change in the process.

Read about the World Bank Report here: www.worldbank.org/en/country/india
Read about the Indian Corporate Responsibility Programme here: https://www.pwc.in/assets/…/handbook-on-corporate-social-responsibility-in-india.pdf

Indian Real Estate ten years on: The success story continues…

By India, News No Comments

Nostalgia isn’t what it used to be.

Red Ribbon Asset Management adopted cutting edge Impact Investment Strategies more a decade ago at a time when the Indian Real Estate Sector was widely perceived to be basking in its “Golden Age”; and its primary stimulus then was a staggering Rs 150 Billion investment from Dubai. If only things could be so good again…

Well, in fact they are; and they aren’t just as good, they’re better.

In the first six months of 2017 a record Rs 160 Billion poured into the subcontinent’s real estate markets from Dubai: easily eclipsing the 2007 pre-crash figure, even after it is adjusted for inflation and currency fluctuations in the intervening ten years. Because the fact is that things have never been so good in real property investment: right here, right now. Nostalgia isn’t all that it used to be.

Because India’s Real Estate Sector is on a resurgent high at the moment, helped in substantial part by the market friendly policies of Prime Minister Modi’s Government which have made real estate an especially attractive investment. In particular through the introduction earlier this year of The Real Estate (Regulation and Amendment) Act, widely known RERA, as well as last month’s innovative Goods and Service Tax which is widely expected to give a decisive further kick to real estate’s accelerating trajectory.

Anuj Puri, Chairman of the newly launched Anarock Property Consultants had this to say on the subject: “It is worth remembering that with the opening up of FDI (Foreign Direct Investment) in 2006 and institutional investments pouring into the sector over the last 10 years, we have already seen an increased level of transparency. That said, it was evident that more regulation was required and RERA will bring unprecedented levels of discipline and transparency into the sector. The Indian government is committed to bringing in the necessary changes that will help home buyers, investors, the various other industry stakeholders and the sector at large.”

With effect from last week, RERA, developers will be required to provide a five year structural warranty for all new builds. It is the first time that such an ironclad condition has been required from developers where,  earlier, the rule of thumb was that a property buyer was lucky to get any sort of long-term guarantee over a building’s structural soundness. How times have changed.

The innovative Real Estate Investment Trust, Demonetisation with its attendant increased levels of transparency and India’s ongoing focus on Affordable Housing have all added to this trend, helping to create a more mature, consolidated and efficient property market on the subcontinent.

So we shouldn’t expect the flow of funds out of Dubai and elsewhere to be slowing down anytime soon.

Red Ribbon Asset Management has placed Indian Real Estate markets at the heart of its investment strategies since that Golden Age back in 2007. And it continues to do so: it continues to look for cutting edge opportunities in India’s burgeoning real estate market, delivering above market rate returns for its investors and at the same time adhering to Mainstream Impact Investment Strategies.

Given India is the fastest growing Growth Market on the Planet at the moment that is a trend, which is increasingly difficult to ignore.

Read about the Real Estate (Regulation and Amendment) Act here

Read about Indian REIT Legislation and comment.

Supporting Indian Eco Tourism: A Catalyst for Mainstream Impact Investmen

By India, News 2 Comments

Mainstream Impact Investment has been at the heart of Red Ribbon’s asset management strategy since the company was founded more than a decade ago. It helps calibrate the subtle economic interactions between targeted economic activity, our communities, wider society and our environment at large; just like a series of interlocking Russian Dolls, each layer intimately impacting on the next. And Red Ribbon’s involvement in the innovative EcoHotels Project in India is a good example of how this new investment paradigm works in practice.

The subcontinent currently has a chronic shortage of available hotel stock, but with Red Ribbon’s support, the EcoHotels Project looks to bridge that deficit in an environmentally friendly way, building attractive, eco friendly facilities that will serve India well over the long term.

But of course this isn’t enough in itself to maximise the positive impacts on local communities and the wider economy. You have to look too at how the Project sits within the next layers in the series; look carefully at what is happening in the wider community as well and in the environment at large.

It is encouraging to learn that on this criterion, the impact of the EcoHotels Project couldn’t be more positive.

India is now taking unprecedented steps to develop an infrastructure and eco economy that is as supportive of eco-tourism as possible. Take just two examples.

The Hill Station at Pachamalai has been attracting increasing numbers of tourists following its designation last month by the local government as an eco-tourism destination. Not only have tourists been flocking into the newly developed treetop houses on the Pachamalai Hills recently added by the Forestry Department, but some three hundred in the last month alone (mainly from Chennai) have also been making the most of the added environmental attractions of the area. A total of Rs 90,000 has been generated in the last month and will go towards not only maintenance of the facility, but also the welfare of the community at large.

Pachamalai District Forest Officer, Satheesh succinctly expressed the objectives of Mainstream Impact Investment when commenting on the project: “It gives a sense of satisfaction to the tourists, being able to contribute to the development of the local community and revenue generated from the Facility will be used to give community loans to locals in the upcoming months.”

Layer after layer, the economic impact of the investment ripples through.

Then take a look at Nagpur where the Vidarbha Economic Development Council is making titanic efforts to promote eco-tourism, which, like the Pachamalai Project, will also serve as a key source of employment for the Region. The Council’s President drew attention to the delicate balance which needs to be nurtured: “ Through ecotourism the States can conserve nature as well as gain financial benefits…. Ecotourism will generate much-needed jobs and income for the local people.”

All of this gives initiatives like Red Ribbon’s Eco Hotel’s Project the best possible prospect of success in delivering above market rate returns for its investors with the maximum possible impact on the wider community and the environment. It’s exactly what Red Ribbon means by Mainstream Impact Investment.

Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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