Singapore-based active investment specialist Fullerton Fund Management announced that it has raised $100 million in the anchor close of its Fullerton Carbon Action Fund, a private equity fund aimed at investing in companies at the forefront of accelerating decarbonization in emerging markets in Asia including China, India, Indonesia, the Philippines, and Thailand. 

According to Fullerton, the fundraising comes as Asia’s climate sector is well-positioned for long-term growth driven by fundamentals that are critical in the world’s transition to net zero, as well as acceleration of local and global climate regulations, with the International Energy Agency estimating that emerging markets in Asia account for roughly 50% of the world’s carbon emissions.

Jenny Sofian, Chief Executive Officer, Fullerton Fund Management said:

“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.”

The new fund will invest in established businesses in manufacturing, industrials, energy, and electric vehicles/mobility sectors and attempt to drive the growth of its portfolio companies in areas such as new market entry, M&A, and sustainability improvements. It aims to close at least three transactions by the first half of 2024.

Anchor investors for the fund include Seviora Group, a Singapore-based asset management group wholly owned by Temasek Holdings, and Singapore-based insurer Income Insurance Limited.

Jimmy Phoon, Chief Executive Officer, Seviora Group said:

“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.”