Fullerton Fund Management has successfully raised US$100 million ($134.2 million) in the anchor close of its Fullerton Carbon Action Fund, a unique private equity fund designed to capture the potential of the climate market opportunity in Asia through investing in companies at the forefront of accelerating decarbonisation in the region.
The fund, managed by Fullerton’s alternatives team, will invest in market-leading businesses in the rapidly growing manufacturing, industrials, energy, and electric vehicles or mobility sectors. Established and profitable businesses with a healthy cash flow will be prioritised over earlier stage venture capital investments as well as infrastructure-related deals, due to their lower downside risks and possibility of attractive returns in the longer-term.
Specifically, the fund will not only allocate capital but also provide strategic support to leaders in the mid-market space in Southeast Asia, India and China, to drive growth of its portfolio companies in areas such as new market entry, merger and acquisition (M&A) and sustainability improvements.
Backed by a strong pipeline of proprietary deals, the fund is currently evaluating several investment opportunities across Asia, with the target to close at least three transactions by the first half of 2024.
Asia has been highlighted as one of the epicentres of decarbonisation due to its accounting for over 50% of the world’s carbon emissions, and represents a US$5 trillion climate investment opportunity by 2030. The region’s climate sector is also well-positioned for long-term growth, thanks to the acceleration of local and global climate regulations.
Furthermore, countries such as China, Singapore, Indonesia and India have all announced individual carbon neutrality timetables as proof of commitment, further solidifying Asia as a region set on achieving its decarbonisation goals.
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“With the acceleration of the decarbonisation roadmap in Asia, we are at an inflexion point where the fight against climate change coincides with the emergence of very compelling growth areas in private equity,” says Jenny Sofian, CEO, Fullerton Fund Management.
“This strategy provides an avenue to ride the decarbonisation wave and advance the net zero agenda in the region, while capturing long-term opportunities,” she adds.
Jimmy Phoon, CEO, Seviora Group, adds: “By leveraging Fullerton’s understanding and investment expertise in the decarbonisation space, we aim to achieve positive environmental change alongside an attractive risk-return profile.”
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Seviora Group is a Singapore-based asset management group owned by Temasek Holdings and Income Insurance. Both entities are shareholders of Fullerton.
“We are committed to this global cause and delighted to invest in Fullerton’s decarbonisation solution in Asia, and partner their expertise on this front,” says David Chua, CIO, Income Insurance.
