The youth of today

How a Malaysian millennial-managed family office charts the future of Asian consumer activity

New to the investment game, family office RHL Ventures acutely follows Asian millennial behaviour and invests in startup companies it believes will capitalise on it. Investments run the gamut from dating, bespoke coffee to “clean” cosmetics.

Malaysia-based family office RHL Ventures is banking on the future as it navigates entertainment and healthcare investments with the younger generations in mind.

“When we started four years ago, people basically told us we were going to fail because we were too young,” RHL Ventures managing partner Rachel Lau (pictured) told FinanceAsia.

Founded in 2016, RHL Ventures’ closed its first fund in April 2019 with $24 million raised between the family office and outside sources. The firm is now deploying the capital within Malaysia’s embryonic fintech startup ecosystem.

The family office has two exits to date. Lau and her partners invested in mobile app Sidestep alongside investors including singer Beyonce Knowles before being bought out in 2019 and the firm recently sold its stake in Singapore-based marketing tech app Perx - its first investment made four years ago.

A millennial perspective

Globally, millennials -  the generation born between 1982 and 1998 - are expected to collectively hold $24 trillion in assets this year, according to a UBS wealth management report, and accounts for roughly 27% of the world population.

Millennial-targeted startups occupy the bulk of RHL Venture’s portfolio, and they run the gamut from dating and bespoke coffee to “clean” cosmetics. San Francisco-based dating site CoffeeMeetsBagel promises “meaningful connections” for the young professional set, while Kuala Lumpur’s Rage Coffee is a Starbucks alternative selling caffeinated drinks and fresh juices.

Last year, the family office invested in South Korea beauty startup Althea which has capitalised on the craze for Korean skincare and makeup sweeping the globe. “Even looking at make-up trends, people are moving towards vegan, sustainable and animal cruelty-free,” Lau noted. In line with this shift, all products on Althea’s curated online shop have vetted for “honest and clean qualities”, according to the company website.

“We are seeing a shift in terms of democratising information and revenue generation.”

Nearly nine in ten (86%) high net-worth millennials in Asia feel they can make a social impact through investing, a survey by RBC’s Wealth Management unit found. And while Lau is hesitant to call herself an impact investor, she finds that businesses worth investing in are inherently socially responsible.

“It is a part of good business and I believe it’s the right thing to do, but if you have two bottom lines it can be very difficult,” she explained. At the end of the day, the firm operates no differently from its larger, more entrenched counterparts: “Our mandate is to make money,” Lau said.

A healthy bet

Millennials are more conscious of what they put in their bodies, not just on them. They are twice as likely to define ‘healthy’ as eating right and exercising compared with Gen X and boomers who focus on not feeling sick, according to a Goldman Sachs report.

RHL Venture’s investment into Malaysian organic grocery chain Signature Market reflects this change in attitude. “We’re generally moving towards healthier living and the younger generation is more aware of what they need to do to stay healthy,” Lau said.

Lau also sees opportunity in directly investing into healthcare systems that support the less  discerning.

According to the World Health Organisation, Asia has the highest rate of urbanisation in the world. Over the last decade, nearly 900,000 rural inhabitants migrate to urban centres every week on average. This has wrought massive changes on healthcare across the region.

“Malaysia has the highest obesity rate in Asia,” Lau said. Roughly two thirds of Malaysian adults are overweight or obese, the WHO reported in 2019.

The situation in Malaysia is part of a broader global trend. The organisation found that rates of obesity have nearly tripled since 1975 - and show no signs of slowing. “As such, we’ve been very focused on healthcare,” said Lau.

Under the influence

As wealth moves into the hands of millennials and their successors in Generation Z, investing trends will be dictated by a new era of consumer demands. 

“There is a huge opportunity to disrupt the entertainment market,” Lau said. This disruption comes in the form of social media influencers.

Worldwide, brands are expected to spend upwards of $15 billion a year on influencer marketing by 2022, Business Insider research estimates. That figure currently sits at approximately $8 billion. 

The industry’s forecasted doubling will be on the backs of consumers and retailers as they fight to keep up with constantly evolving trends.

Lau hopes to pair the public’s insatiable demand for media influencers with a focus on the region’s entertainment industry. “I’m a believer in Asia for Asia,” Lau explained. “Half of the world’s population is Asian, and we don’t have recognisable artists.”

But as internet use rises, the time is ripe for change. The number of internet users in Southeast Asia increased by more than 100 million over the last four years, according to a report by Temasek and Google.

As internet use penetrates even the most remote villages in Southeast Asia, RHL Ventures is looking to bank on a surge in demand for homegrown talent. 

To date, the firm has no influencer-focused investments in its portfolio but comparing the marketing value of celebrities and influencers, the investor reckons the next big thing in Asian media will be coming from social media, not the big screen. 

“Influencers have a much larger reach [than celebrities] because most people are on platforms like Instagram and Facebook,” Lau noted.

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