Fullerton Fund Management, an affiliate of Temasek’s Seviora Holdings, has closed $100 million in anchor commitment from its parent group and Singapore’s Income Insurance for its private equity fund dedicated to decarbonisation investments in Asia’s emerging markets.
While the fundraising target of the mandate was not disclosed, DealStreetAsia reported in November 2022 that the asset manager is seeking to raise around $600 million to $1 billion.
Fullerton Carbon Action Fund will focus on “established, profitable and robust cash flow businesses” in the manufacturing, industrials, energy, and mobility sectors, according to a statement on Wednesday. Avoiding earlier-stage venture capital and infrastructure-related deals, its target assets have lower inherent downside risks and are positioned to deliver attractive financial returns over the long term.
Fullerton’s latest fund will invest in mid-market businesses in Southeast Asia, India, and China and help drive the growth of its portfolio companies via new market entry, M&A and sustainability improvements.
“With the acceleration of the decarbonisation roadmap in Asia, we are at an inflection point where the fight against climate change coincides with the emergence of very compelling growth areas in private equity. This strategy provides an avenue to ride the decarbonisation wave and advance the net zero agenda in the region while capturing long-term opportunities,” said Jenny Sofian, CEO of Fullerton Fund Management.
The fund, which is managed by Fullerton’s alternatives team, has a robust pipeline of proprietary deals and is targeting to close at least three transactions by the first half of 2024.
The announcement comes at a time when asset managers have been ramping up their investments and offerings in ESG and climate investing to cater to client demand and battle against climate change. Southeast Asian mid-market private equity firms such as Triple P Capital, Mekong Capital and Bintang Capital Partners are among the asset managers riding the wave.
“As a significant asset owner who is invested globally, the choices of our capital allocation in financial markets can support climate transition and contribute to positive changes… we prioritise reduction of financed emissions, allocation of capital towards sustainable investments, and transition financing to advance Net Zero 2050,” said David Chua, Chief Investment Officer, Income Insurance.
