Singapore-based private equity firm Tembusu Partners announced Thursday that it has partnered with Singapore-based independent media and business intelligence company Eco-Business to launch the Sustainable Future Fund, an inaugural platform that will invest in innovative technologies that solve urgent sustainable development challenges and tap into the trillion-dollar opportunity across Asia.
The targeted $100 million fund will pursue high-impact growth stage opportunities across the region that focuses on addressing the climate crisis and reducing social inequalities, Tembusu Partners said in a statement.
According to Tembusu Partners, the fund will take a broad sector approach and focus on the five high opportunity areas it has identified: energy transition, climate action, sustainable cities, and circular economy, sustainable food and agriculture, and inclusion.
It has a robust pipeline of quality deals and has already invested in an Indonesian start-up in the financial inclusion space. It is in the midst of investing in another three opportunities in the region involved in areas such as mental health, energy transition, and sustainable cities.
The fund’s launch comes as the Intergovernmental Panel on Climate Change (IPCC) report issued recently–described as “a code red for humanity” by the UN Secretary-General António Guterres–warns that rising temperatures will lead to dangerous weather extremes and rising sea levels in the coming years, and Asia is particularly vulnerable to its effects.
With the COP26 UN Climate Change Conference set to take place next month in Glasgow, Scotland, Guterres has stressed that more ambition is needed with respect to climate mitigation, adaptation, and finance.
For Southeast Asia in particular, sea levels are rising faster than elsewhere, and shorelines are retreating in coastal areas where 450 million people live. At the same time, the region is also home to the world’s most rapidly developing markets with huge infrastructural needs.
A recent UNESCAP report reveals that even before the pandemic, the Asia-Pacific region was not on track to meet any of the UN Sustainable Development Goals (SDGs) by 2030. The SDGs are an investment pathway that can help the region overcome economic uncertainty and tap into a trillion-dollar opportunity for new businesses, products and services that help achieve a sustainable and equitable future.
The fund is uniquely positioned to take advantage of these opportunities and drive change in the region with its impact-driven investment strategy and proprietary framework for ESG assessment that will ensure its portfolio companies deliver not just financial returns but demonstrable impact, said Tembusu Partners.
The fund will tap on the vast, combined networks of Tembusu Partners and Eco-Business which provide an inside track to a strong deal pipeline, and will seek family offices and investors who are aligned in values and committed to supporting this mission to create impact in Asia.
Meanwhile, the fund has secured a commitment from its first overseas investment partner, Horizon Family Partners, who have committed to raise up to $20 million from a number of prominent international family offices. Horizon Family Partners was created to bring together like-minded multi-generational families to deliberate innovative ideas relating to global sustainability.
In addition, Rumah Group and its philanthropic arm Rumah Foundation, also joined the fund as a limited partner. Led by established philanthropist Stanley Tan, the Foundation has committed to investing S$5million ($3.7 million).
The fund also announced the international advisory board members joining its team. They include United Nations Global Compact Founding Executive Director and Arabesque Chairman Georg Kell, UK Sustainable Investment & Finance Association (UKSIF) Chairman and Global Reporting Initiative (GRI) Former Chief Executive Officer Michael Meehan, Cleantech Group Founder, Corporate Knights Former Chair and impact entrepreneur Nicholas Parker. The board will be chaired by Lim Hwee Hua, Former Minister in the Office of the Prime Minister of Singapore, and Second Minister for Finance and Transport.
“The themes we are focusing on in this fund target founders and companies which solve some of the biggest issues of our era. Together with Eco-Business, we aim to support the scaling up of new and growing impact-driven businesses in Asia, towards building a sustainable future. We are also delighted that KPMG will be supporting the fund by providing insights on ESG developments,” said Andy Lim, Chairman of Tembusu Partners.
KPMG (Singapore) Managing Partner Ong Pang Thye said, investing in companies that have a clear roadmap on how to help countries and societies achieve sustainability will shift the needle for global climate change, and ultimately, lending financial support is about seeding the best insights into the ecosystem, so that deep-seated change can really happen.
“KPMG in Singapore welcomes working alongside Tembusu Partners to make sustainability a reality, as we provide insights on ESG trends that impact the near and longer-term of Asia’s future, while encouraging companies to consider ESG transformation efforts that can make that difference for the environment, economy and enterprise growth”, he added.
The Sustainable Future Fund Managing Partner and Eco-Business Managing Director Jessica Cheam said that this unique fund will be well-positioned to tap the growth of the ESG and impact investing space in Asia.
“By helping to facilitate capital into the most promising companies in the region, we will be able to further scale our sustainable development impact,” she added.
Lim Hwee Hua, advisory chair, commented “The urgency of the climate crisis is finally becoming the mainstream concern that it should be. The good news is that ESG and finance are becoming more closely intertwined – and there is growing evidence today to show that investors can see better, more sustainable returns through ESG investing. There is a huge opportunity here for capital to be deployed in game-changing solutions across Asia.”