Fullerton Fund Management announced it has successfully raised $100 million in the anchor close of its Fullerton Carbon Action Fund. This fund captures the major climate market opportunity in Emerging Asia by investing in companies at the forefront of accelerating decarbonization in the region.
Asia accounts for over 50% of carbon emissions and represents a $5 trillion climate investment opportunity by 2030. And the region’s climate sector is well-positioned for longer-term growth, driven by critical fundamentals in the world’s transition to net zero. The acceleration of local and global climate regulations also serves as a strong tailwind for the sector. Within Asia, there is a clear focus on actively pursuing decarbonization outcomes, and countries have announced their carbon neutrality timetable as proof of a commitment – China 2060, Singapore 2050, Indonesia 2060, and India 2070.
The fund will invest in market-leading businesses in the manufacturing, industrial, energy, and electric vehicles/mobility sectors. It will seek established, profitable, and robust cash flow businesses and avoid earlier-stage venture capital investments and infrastructure-related deals. These target companies have lower inherent downside risks and are proven to deliver attractive financial returns over the long term.
Focusing on leaders in the mid-market space across Southeast Asia, India, and China, the fund offers strategic support and capital to drive the growth of its portfolio companies through new market entry, M&A, and sustainability improvements.
The fund is managed by Fullerton’s seasoned Alternatives team, which has an average of 16 years of industry experience. The investment approach is supported by a proprietary sustainability management framework that seeks to drive significant decarbonization outcomes in portfolio companies.
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 strategy’s anchor investors. As shareholders of Fullerton, Seviora, and Income Insurance are committed to supporting investment strategies that can help address climate change while seeking to deliver attractive risk-adjusted returns for investors.
KEY QUOTES:
“With the acceleration of the decarbonization 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.”
– Jenny Sofian, Chief Executive Officer, Fullerton Fund Management
“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 decarbonization space, we aim to achieve positive environmental change alongside an attractive risk-return profile.”
– 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 prioritize 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 decarbonization solution in Asia, and partner their expertise on this front.”
– David Chua, Chief Investment Officer, Income Insurance
