India's Quantum launches $1b ESG fund
Indian asset management and equity research firm Quantum Advisors has launched a $1 billion investment fund that will take a PE-style approach to driving environmental, social, and governance (ESG) improvements in listed companies.
The fund will be chaired by Mukund Rajan, former chief ethics officer of the Tata Group and managing director of the Tata Opportunities Fund. Govind Sankaranarayanan, founding CEO and CFO of Tata Capital and recently announced CEO of Social Finance India, helped develop the strategy, and additional former Tata Group executives will take on senior management roles.
Quantum’s fund will take meaningful stakes in companies that have been overlooked by other public market investors, where a focus on ESG improvements can bring business benefits. It will collaborate with a variety of stakeholders, including other shareholders, government, regulators, and multilateral institutions to advance its ESG agenda.
“Every day the number of companies and founders one can trust and rely on to build sustainable, profitable institutions is declining,” said Quantum founder Ajit Dayal in a release. “This fund will act as a catalyst to force businesses to think hard about their choices and offers a viable path to promoters who wish to add value to the communities they work in, and long-term benefits to their shareholders.”
On a broader level, impact funds are attracting a growing level of interest from both institutional investors and global PE firms seeking investments that can help to address social and environmental challenges while delivering attractive financial returns for LPs. Bain Capital and TPG Capital have both launched impact vehicles, along with KKR, which made the first investment from its global impact strategy in Singapore’s Barghest Building Performance last year.
In India specifically, Social Finance announced plans to raise $2 billion for investments across two vehicles focused on education and local micro, small and medium-sized enterprises (MSMEs). The two vehicles, India Impact Fund of Funds (IIFF) and India Education Outcomes Fund (IEOF), are targeting $1 billion each.
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