Singapore PE firm Azalea launches $100m ESG investment fund-of-funds

Singapore-based private equity manager Azalea Investment Management has launched a $100 million fund-of-funds to invest in environmental, social and governance (ESG) focused opportunities.

The fund, Altrium Sustainability Fund I (ASF I) is co-seeded by the Azalea Group and financial services company Singlife with Aviva. Each party has committed an initial $50 million to the fund.

“ASF I is focused on funds with managers that invest in companies that not only incorporate ESG factors in business decisions, but are also committed to investing purposefully to create lasting positive environmental and social impact,” Azalea said in a statement.

The fund will look at five core themes of climate, resource management, healthcare, education, and financial inclusion. It will focus primarily on buyout and growth strategies to generate private equity market returns.

“Private equity is uniquely positioned to be a force for good through its long-term investment horizon and innate appetite for value creation. Investing through a sustainability lens not only builds a forward-looking portfolio, but it also assures enduring value, thus enhancing the likelihood of resilient returns,” said Margaret Lui, CEO of Azalea.

Last December, Azalea closed its second flagship private equity fund-of-funds, Altrium II, at $805 million. The first vehicle was a 2019 vintage $650 million fund. The firm also provides the Astrea PE bonds to allow access to private equity opportunities to retail investors through bonds backed by portfolios of private equity funds.

Azalea said it also signed up for the ESG Data Convergence Project, which seeks to standardise ESG metrics and provide a mechanism for comparative reporting for the private market industry. The collaboration represents over $8 trillion in assets under management, with involvement from major private equity groups such as Carlyle, CVC, and EQT.

Azalea is a wholly-owned subsidiary of Seviora Holdings, which is in turn wholly owned by Singapore state investor Temasek.

Meanwhile, Singlife has recently seeded two sustainable funds. It said it will continue to pursue ESG-focused investments. In November 2021, Singlife announced its participation in the Monetary Authority of Singapore’s Project Greenprint. The project uses real-time data in the transport and logistics sector to monitor emissions and to review if the data can enhance underwriting and reduce premiums for the sector.

Singlife with Aviva was formed by the S$3.2 billion ($2.36 billion) merger of insurance and financial services firms Aviva Singapore and Singlife in 2020.

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