The private equity fund seeks to capitalise on Emerging Asia's huge and fast-growing decarbonisation opportunities.
SINGAPORE, March 20, 2024 /PRNewswire/ -- Fullerton Fund Management ("Fullerton") has successfully raised US$100 million in the anchor close of its Fullerton Carbon Action Fund (the Fund). The Fund captures the enormous climate market opportunity in Emerging Asia by investing in companies at the forefront of accelerating decarbonisation in the region.
Asia accounts for over 50% of the world's carbon emissions and represents a US$5 trillion climate investment opportunity by 2030[1]. The region's climate sector is well-positioned for long-term growth driven by fundamentals that are critical in the world's transition to net zero. The acceleration of local and global climate regulations, also serve as strong tailwinds for the sector.
Within Asia, there is a clear impetus and focus to actively pursue decarbonisation outcomes, and countries have announced their carbon neutrality timetable as proof of their commitment - China 2060, Singapore 2050, Indonesia 2060 and India 2070[2].
The Fund will invest in market leading businesses in the rapidly growing manufacturing, industrials, energy, and electric vehicles/mobility sectors. It will seek established, profitable and robust cash flow businesses, and avoid earlier stage venture capital investments as well as infrastructure related deals. These target companies have lower inherent downside risks and are well-positioned to deliver attractive financial returns over the long-term.
Focusing on leaders in the mid-market space in Southeast Asia, India and China, the Fund provides strategic support alongside capital to drive the growth of its portfolio companies in areas such as new market entry, 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.
The Fund is managed by Fullerton's seasoned Alternatives team, who have an average of 16 years industry experience. The investment approach is underpinned by a proprietary sustainability management framework that seeks to drive significant decarbonisation outcomes in portfolio companies.
"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. 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, Chief Executive Officer, Fullerton Fund Management.
Seviora Group, a Singapore-based asset management group wholly owned by Temasek Holdings, and Income Insurance Limited, one of Singapore's leading insurers, are the anchor investors for this strategy. As shareholders of Fullerton, Seviora and Income Insurance are committed to supporting investment strategies that can help to address climate change while seeking to deliver attractive risk-adjusted returns for investors.
"The need for collective action on climate change has never been greater. Carbon transition in Asia will require significant capital to drive the development and adoption of solutions that can make a substantial impact on the environment within a tangible timeframe. 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," said Jimmy Phoon, Chief Executive Officer, Seviora Group.
"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. Hence, we prioritise reduction of financed emissions, allocation of capital towards sustainable investments, and transition financing to advance Net Zero 2050. 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," said David Chua, Chief Investment Officer, Income Insurance.
About Fullerton Fund Management
Fullerton Fund Management Company Ltd ("Fullerton") is an active investment specialist, focused on optimising investment outcomes and enhancing investor experience.
We help clients, including government entities, sovereign wealth funds, pension plans, insurance companies, private wealth and retail, from the region and beyond, to achieve their investment objectives through our suite of solutions. Our expertise encompasses equities, fixed income, multi-asset, alternatives and treasury management, across public and private markets.
As an active manager, we place strong emphasis on performance, risk management and investment insights. Incorporated in 2003, Fullerton is headquartered in Singapore, and has associated offices in Shanghai and Brunei. Fullerton is part of a multi-asset management group, Seviora, a holding company established by Temasek. Income Insurance, one of Singapore's leading insurers, is a minority shareholder of Fullerton.
For more information, please visit www.fullertonfund.com
Legal Disclaimer
For investor residing or domiciled in the European Economic Area (EEA), this is a marketing communication. Fullerton Carbon Action Fund (the "Fund") is a Luxembourg special limited partnership under set-up; the information disclosed herein may change. This content is not intended to be a financial and/or marketing promotion and does not constitute or form part of, and should not be construed as, an offer, invitation or inducement or recommendation to make an investment in the Fund. For professional investors only.
[1] Source: bp Statistical Review of World Energy, 2022, Asia Investor Group on Climate Change (AIGCC) [2] Source: PwC Net Zero Economy Index: Asia Pacific's Transition |
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