After earning his M.B.A. from Columbia University, Kyungsun Chung, grandson of late Hyundai group founder Chung Ju-yung, could easily have joined one of South Korea’s largest business groups, just like many of his cousins did. But after looking into climate change, Chung chose to forge his own path as an impact investor.
In late September, Hurricane Ian tore through southwestern Florida, killing more than 100 people and damaging some 18,000 homes. According to estimates by catastrophe modeling company Karen Clark & Co., privately insured losses from Ian would be close to $63 billion. That would make it the costliest storm in Florida’s history.
Natural disasters like these are exactly why Kyungsun Chung, a scion of Hyundai’s founding family, is interested in climate change—which is making hurricanes and other disasters more destructive—and forging his own path as an impact investor.
“When I went to business school, that was the first time I got to see a lot of data on climate change,” says Chung, 36, in an interview on the sidelines of the Forbes Global CEO Conference in Singapore, where he spoke on a panel about ESG and sustainability. “Looking into the data really made me worry because, for one thing, my livelihood will be affected. And the second thing is, the first industry that will be wiped out because of climate change is the insurance industry.”
Chung points to California’s Camp Fire in 2018 as an example. It was the state’s biggest and deadliest fire, and caused the bankruptcy of local insurer Merced Property & Casualty from claims related to the fire.
A collapse of the insurance industry will also affect Chung’s livelihood. He is the only son of Chung Mong-yoon, the 67-year-old chairman and largest shareholder of Hyundai Marine & Fire Insurance, and the second youngest of Hyundai founder Chung Ju-yung’s eight sons. “That was a really big sign for me,” Kyungsun Chung says about Merced’s bankruptcy. “So that’s why I decided to become much more proactive in impact investing.”
Kyungsun Chung and Scott Jeun.
COURTESY OF THE SYLVAN GROUP
In 2019, after earning an M.B.A. from Columbia University, Chung launched private equity firm The Sylvan Group in Singapore with his classmate Scott Jeun. Sylvan specializes in impact investing, which focuses on investments that benefit the environment and society—as well as turn a profit. Backed by $200 million from members of the Chung and Rockefeller families, Singapore billionaire Wee Cho Yaw’s United Overseas Bank and Hanwha Life, among others, Chung is now looking to invest in companies that can help combat climate change.
In February, Chung made his first investments, though it wasn’t related to climate change—at least not directly. Sylvan acquired majority stakes in four Singapore healthcare and pharmaceutical companies for $140.5 million: Artemis Health Ventures, DX Imaging, Juniper Biologics and Juniper Therapeutics. “Everything is so intertwined,” says Chung. “You cannot push for climate action without getting the buy-in from the people. But when they are not happy with their education, healthcare, housing and everything, you cannot go there.”
Chung has long been involved in nonprofits. In 2012 he founded Root Impact, a nonprofit in South Korea that supports social entrepreneurs, such as by providing office space, who are creating companies that serve a social purpose. Chung is also a board member of Rockefeller Philanthropy Advisors, one of the world’s largest philanthropic service organizations.
Chung has said he was inspired by his grandfather who taught him that rich people need to give back to society. Chung Ju-yung founded the Asan Foundation in 1977, which builds hospitals and medical research centers, sets up scholarships and supports local charities. In 1998 the Hyundai founder, who was born in what is now North Korea, famously led 50 trucks holding 500 cows to the Hermit Kingdom, which has been suffering from food shortages.
Chung Ju-yung
Getty Images
“You cannot push for climate action without getting the buy-in from the people.”
Another trend Kyungsun Chung is looking to capitalize on is the shift away from globalization that has defined the past three decades. “Starting from Covid, and then decoupling and deglobalization, and the war in Ukraine—that means we will no longer have a stable supply chain,” says Chung. “So certain things will become much more expensive, and some of them will be important necessities, such as food.”
In early February, for example, residents of Hong Kong faced a shortage of vegetables after strict Covid-19 controls across the border in mainland China badly disrupted fresh food supplies. Food shortage experiences like this boosted demand for farm-tech firms like Farm66, a vertical farming company in Hong Kong that grows vegetables and fruits aquaponically. “During the pandemic, we all noticed that the productivity of locally grown vegetables is very low,” Gordon Tam, cofounder and CEO of Farm66, told Forbes Asia earlier this year. “The social impact was huge.”
And in Singapore, prices for chicken—the most popular meat in the city-state—jumped after neighboring Malaysia temporarily banned chicken exports on June 1 to stabilize domestic supplies that have been disrupted by the pandemic, extreme weather wrought by climate change and the war in Ukraine—a major producer of corn and wheat, which are used in chicken feed. “This time it is chicken, next time it may be something else. We have to be prepared for this,” Singapore’s Prime Minister Lee Hsien Loong said in local media interviews in late May.
“I believe the agricultural sector will face a very difficult time very soon,” says Chung, adding that he’s interested in alternative protein, sustainable agriculture and farming technologies.
Kyungsun Chung at the Forbes Global CEO Conference in Singapore on September 27, 2022.
Forbes Asia
He’s not alone. Other investors have already poured millions into food-related startups, even in the face of surging inflation and higher interest rates. In late June, for example, Hong Kong-based Avant Meats, which grows fish filets and fish maw (swim bladder—a delicacy in China) using cell-culture technology, raised $10.8 million in a funding round in late June. The funding was led by S2G Ventures, a Chicago-based firm focused on food and agriculture that’s backed by billionaire Lukas Walton (a grandson of Walmart founder Sam Walton), and will be used to build a pilot plant in Singapore. Avant Meats is one of 16 Hong Kong startups that made the 100 to Watch list this year.
In Singapore, plant-based chicken alternative maker Next Gen Foods raised $100 million in funding in February to fuel its global expansion plans, including the U.S. Its star-studded roster of investors includes Southeast Asian firm Alpha JWC Ventures, China’s first food-tech venture capital fund Bits x Bites, English soccer player Dele Alli, Singapore’s global fund EDBI, Midas Lister Jenny Lee’s GGV Capital, Kuok Meng Xiong’s (grandson of Malaysia’s richest person Robert Kuok) K3 Ventures, Singapore’s state-owned investor Temasek and Daryl Ng’s (eldest son of Singapore billionaire Robert Ng) food and beverage maker Yeo Hiap Seng.
“When we had this abundance of VC money, they invested into all these food-tech companies. Now they are finally becoming more viable and ready to scale,” says Chung. “So they could be a target of private equity firms like us. We are really seriously looking into this sector.”
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Source: https://www.forbes.com/sites/johnkang/2022/10/31/why-this-hyundai-scion-became-an-impact-investor-instead-of-joining-south-koreas-third-biggest-business-empire/