Temasek launches Asia impact fund
Singapore’s Temasek Holdings has set up a private equity fund that will make impact investments, primarily in developing Asia.
The fund, known as ABC World Asia, was announced by Temasek Trust, the government-controlled investment fund's philanthropic arm. Temasek and Pavilion Capital will also support the fund manager. It is part of a Singapore government plan to meet the UN's sustainable development goals, which include a range of environmental, and socioeconomic uplift targets for 2030.
ABC World Asia will invest companies seen as having demonstrated a commitment to impact across themes including financial and digital inclusion, improved healthcare and education, climate and water-related solutions, sustainable food and agriculture, and livable smart cities. Core geographies include South and Southeast Asia and China.
"We see compelling opportunities in impact investing across Asia. The complex social and environmental challenges in our region present the potential for investors to achieve substantial impact," David Heng, CEO, ABC World Asia, said in a statement. "With the impact investing industry still in its infancy, particularly in Asia, we are excited by the prospect of establishing impact investing as a critical lever for sustainability."
Temasek said the fund would invest companies with "measurable" social or environmental impact alongside a compelling risk-adjusted return. This comes as impact investment attracts increased interest from global private equity players despite stakeholders struggling to standardize the strategy's relevant criteria and reconcile the evolving nature of what constitutes a material environmental, social, and governance (ESG) investment factor.
Temasek set up its philanthropic unit in 2007 with a view to playing a more active role in impact investments beyond its usual approach of grant-making. Temasek saw its net portfolio value reach S$308 billion ($225 billion) as of July last year as investment activity ticked up in Asia. The firm deployed S$29 billion in 2018, compared to S$16 billion the prior year. Singapore and China account for 27% and 26% of the portfolio, with the rest of Asia representing 15%.
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