October 31, 2019

By Lynda Kiernan

ABC World Asia, a geographically-focused impact investing firm launched in May of this year by Temasek Trust, the philanthropic arm of Singapore’s sovereign wealth manager Temasek, announced it has closed its inaugural fund at US$282 million.

Investors in the fund include Temasek and Temasek Trust, Pavilion Capital, Mapletree Investments, Seatown Holdings, and Sembcorp Industries.

“The investors in our fund bring deep and complementary experience spanning various markets and sectors,” said David Heng, CEO, ABC World Asia. “With their support, we believe we are well-positioned to identify and invest in good companies that seek to deliver positive impact alongside sustainable financial return.”

The fund’s investment mandate is aligned with Temasek’s ABC framework:  A – an active economy; B – a beautiful society; and, C – a clean Earth, which has its foundation in the UN’s 17 Sustainable Development Goals.

Geographically, ABC World Asia will focus on China, South Asia, and Southeast Asia, and portfolio companies will need to demonstrate commitment to positive, measurable social or environmental impact in the fields of sustainable food and agriculture, climate and water solutions, health and education, smart and livable cities, or financial and digital inclusion, while also generating risk-adjusted returns.

“While the industry is still at its early stages of development, we already see a range of opportunities to participate in impacting investing across Asia,” said Heng.

Impact Drilling Down

Impact investing is booming. 

In June 2018, Fast Company reported that a survey conducted by the Global Impact Investing Network (GIIN) concluded that in just one year’s time, since mid-2017, the value of the impact investing space, as quantified by assets under management, doubled from $114 billion to $228 billion. 

And while it’s true that impact and socially responsible investing has gained serious traction in recent years, the UN estimated that there remains a $2.5 trillion (with a “t”) funding gap per year between current impact investing levels and what is needed to achieve the UN’s Sustainable Development Goals (SDGs) in emerging countries alone.

“Environmental, Social and Governance” issues are coming to the fore for many fund managers, with vast amounts of ESG and Ethical Investing research being conducted,” said Chipo Muwowo, head of content at Savvy Investor, in his article, Rapid Urbanization and Growing PE Investing: African Agriculture Set to Rise, which was featured in the GAI Gazette, Volume 6, Issue 3 that was distributed in conjunction with the annual Global AgInvesting Asia event held in Tokyo on 12-13 September 2019.

Maybe it gives invested capital more power, or increases the ability to quantify positive change, but recently, there has been more mentions of investors not only wanting to make a difference, but creating funds to drive measurable change within certain geographic regions, or for specific populations of people.

This was evident in August of this year, when Australia-based Palladium announced the launch of Palladium Impact Fund I, a fund established to invest in SMEs along the agribusiness value chain and off-grid clean energy in sub-Saharan Africa. The fund will also prioritize its capital to women, fostering economic empowerment and generating opportunities for the underserved.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.