Dutch investor APG, on behalf of its pension fund clients ABP and bpfBOUW, has invested in an environmental venture capital fund managed by Adamantem Capital.
According to APG, the Environmental Opportunities Fund, which has AU $350m of capital committed, invests in businesses in the Asia-Pacific region that support the net zero transition. These include clean energy, electrification, natural capital, abatement and the circular economy.
The Dutch investor, which manages €616bn of assets, stated that Adamantem will report to APG in alignment with its impact reporting framework and has agreed to join the ESG Data Convergence Initiative (EDCI).
Commenting on APG’s investment, Shirley Ma, APG’s senior portfolio manager for private equity, said: “For Adamantem, it is the first time they launched a fund focused on environmental opportunities. In preparation for launching the new product, the firm had put a satisfactory impact investing framework in place in terms of due diligence, assessing impact risks and opportunities, setting targets and KPIs, as well as reporting outcomes.
“Over the past year or so, we worked closely with Adamantem to further improve their framework and align it with APG’s standards.”
Ma explained that an example of companies the fund invests in is an Australia-based manufacturer of transformers that provides associated data and software services to help the energy transition in the grid infrastructure.
“Additionally, there is a New Zealand-based provider of residential EV charging hardware, software, and operations solutions catering to both New Zealand and Australia," she said.
Ma explained that typically, as far as ESG and impact investing are concerned, Europe is in a leading position, yet Australia is definitely a more mature market than the rest of Asia. She highlights that a challenge when making these types of investment in the Asia-Pacific region is that many see these opportunities from a "financial lens" and do not have the needed impact frameworks.
“For that, the managers need to know how to assess climate and circularity solutions and set impact value targets. Also, they need to be able to generate and track data that can be reported to investors. These qualities are still not easy to find in Asia,” she says.
Although this will take time to overcome, Ma explains: “The slowdown of the fundraising market could be helpful as private equity fund managers tend to be more willing to spend time engaging with investors and listening to their requirements.”
