His Highness the Aga Khan Urges “Impact Investing” in Developing Areas

His Highness the Aga Khan

PARIS -- His Highness the Aga Khan, founder and chairman of the Aga Khan Development Network, urged guests at the ULI Europe Annual Conference in Paris to consider the social and environmental impacts of investment decisions.

His Highness the Aga Khan, who recently was awarded the 2011 ULI J.C. Nichols Prize for Visionaries in Urban Development, said the industry would benefit from “a great deal” of upside potential if it made investment decisions that pursued a balanced mixed of financial, social, economic and environment goals.

Watch videos of the activities of the Aga Khan Development Network.

“A wide spectrum of investors has been increasingly involved in ‘impact investing,’ using a diverse array of assets, employing highly disciplined due diligence and accounting analyses,’ His Highness said.

He added that it had been exciting to see the substantial growth of “impact investments” in recent years, and that growth was expected to reach around $500 billion in the next 10 years, but that there had been “relatively little history” of it in the property development field.

“What is now needed is [to have] more knowledgeable intermediaries who fully comprehend the realities of business risk and reward in the property field – while also understanding what it takes to improve the quality of life for the engaged populations,” said His Highness.

“I believe the Aga Khan Development Network and the Urban Land Institute can bring a great deal to this discussion,” he added.

The Altit Fort in Hunza, Pakistan. Restored by the Aga Khan Trust for Culture.

The Aga Khan Development Network, which is active in 30 developing countries, focuses on not-for-profit projects covering health, education, rural development and institution building.

Faith had been restored in the potential of regions in the less-developed world, opening up opportunities for investing in places “not previously in the spotlight,” His Highness said. Sustainable development that improves the quality of life for people of the developing world will depend on efforts that make sense both socially and financially, he added.

“As this process goes forward, the disciplines and resources of the property investment community will be particularly well- suited to such opportunities,” he said, citing the growing demand for property in the developing world, which reflects not only high birth rates but also the rapid pace of urbanization.

“Dramatic economic development in the industrialized world was invariably accompanied by accelerated urbanization,” he said. “Today, in less developed countries, population growth and urbanization are combining with the rapid growth of the middle class as well as with climatic and geographical constraints on the supply of land -- and the likely result is a continuing increase in property values.”

Cairo’s Al-Azhar Park

The Nichols Prize, endowed by the family of Jesse Clyde Nichols, honors the legacy of the legendary Kansas City, Missouri, developer. A founding ULI member, J.C. Nichols(1880–1950) is widely regarded as one of America’s most influential entrepreneurs in land use during the first half of the 1900s.

Read the full text of His Highness the Aga Khan’s speech.