Singapore-based private equity firm Heritas Capital has secured the first close of its Asia Impact First Fund (AIFF) at $20 million, according to a statement on Wednesday.
Singapore-listed financial services firm DBS committed $10 million in the first close to become the anchor investor.
Other limited partners that joined the fund include Tsao Family Office, IMC Group, the Ishk Tolaram Foundation, ANF Family Office, and Pang Sze Khai who is the chairman of Octava Foundation and Octava Pte Ltd.
The AIFF, which was launched in August last year, has a target of $50 million. It aims to fully close the fund in the next 18 months, it shared at a conference in Singapore.
The vehicle seeks to back 10-15 innovative and high-growth social enterprises across Southeast Asia and India, investing in the venture and early growth stages with ticket sizes of up to $3 million. It will focus on two main themes of improving lives and livelihoods and protecting the environment.
According to AIIF, the fund has placed a greater emphasis on impact for its investments. This involves setting key impact metrics guided by its in-house framework to monitor its level of societal or environmental impact.
For instance, if AIIF’s portfolio company is aimed at uplifting marginalised communities, it will look at the number of beneficiaries or amount of incremental income created as a result of its investment.
The fund also aims to generate “fair market returns” of 5-10% IRR for its investors, in line with impact funds globally but slightly lower than industry PE funds. As an evergreen fund, all proceeds will also be recycled back into the vehicle.
“We look forward to raising awareness and shifting consciousness within societies across Asia towards addressing the funding gaps for fast-growing social enterprises that offer innovative solutions for enhancing livelihoods of disadvantaged communities and protecting the environment,” said Chik Wai Chiew, CEO and executive director at Heritas Capital.
The impact fund follows the launch of Heritas Venture Fund II and Heritas Growth Fund III in 2021. The firm has backed companies in the healthcare, food and education sectors across Asia including Alchemy Foodtech, BHL Education, JioHealth, MFine, Hummingbird Bioscience, Cakap and ConveGenius.
Heritas Capital had $250 million in assets under management by the end of 2021, according to the firm’s 2021 annual impact report. It has invested over $200 million into more than 40 companies. These businesses have gone on to raise follow-on funding totalling $500 million.
DBS, on the other hand, said its anchor investment in AIFF reflects its commitment to supporting social enterprises that are tackling pertinent social and environmental issues in Asia.
“There’s a heightened need to cultivate a strong ecosystem to support their growth – and through the AIFF, we hope to bring together like-minded partners who share our desire to empower more of these innovative and meaningful businesses, and enable them to thrive, scale, and go on to create greater positive impact,” said Karen Ngui, DBS Strategic Marketing and Communications and Board Member of DBS Foundation.
Kristie Neo contributed to this article.