Fri, Dec 11, 2020 – 11:46 AM
UOB Venture Management (UOBVM), the private equity arm of UOB, in collaboration with Credit Suisse, has raised more than US$60 million at the first close of its second impact fund.
The Asia Impact Investment Fund (AIIF) II looks to improve the well-being and livelihoods of low-income communities in South-east Asia and China through its investments.
Its first round of fundraising received capital commitments from institutional and accredited investors, including UOB, global family offices and high-net-worth investors.
Many of the existing investors from the first fund, AIIF I, re-committed to the new one. This reflects “strong interest to invest in proven solutions that can address social challenges in Asia”, said Credit Suisse’s head of sustainability strategy, advisory and finance for Asia-Pacific, Joost Bikes.
UOBVM expects to complete the final closing of AIIF II next year, with a target of US$100 million to be raised in total.
After that, AIIF II will make equity investments of about US$1 million to US$15 million into private high-growth companies either in sectors such as agriculture, education, healthcare and logistics, or that focus on improving the accessibility of affordable housing, sanitation, clean water and energy.
UOBVM is the fund manager while Credit Suisse is its impact adviser, providing assessments of the impact created or added by each fund’s investee firms and through the fund’s investments.
AIIF II has a double bottom-line fund mandate to achieve meaningful social impact and financial returns, said UOBVM in a press statement on Friday.
Investors are increasingly emphasising on sustainability, noted Seah Kian Wee, chief executive officer of UOBVM. Likewise, Credit Suisse’s Mr Bikes has seen a growing appetite for impact-investing solutions in recent years.
Said Mr Seah: “While we seek to achieve quality financial returns for our investors, we also continue to partner them in generating positive social impact by helping the vulnerable segments of the community across South-east Asia and China.”
The investor base for such solutions is also broadening, and now includes ultra-high net worth individuals, corporates, family offices and next-generation clients, according to Mr Bikes.
UOBVM’s impact funds, AIIF I and AIIF II, invest primarily in small and medium-sized enterprises across the region. These companies use technology to transform traditional business models for the benefit of low-income communities.
An example is Indonesia’s largest agritech firm, TaniHub Group, which connects local farmers to customers on its proprietary digital platform to overcome challenges such as lack of market access, food security and farming techniques.
AIIF I raised US$55 million in 2016. Since then, more than 15 million low-income individuals have benefited from the fund’s investee companies, such as through higher income, better access to financing and affordable products, UOBVM said.
The first fund is aligned with the Operating Principles for Impact Management, of which UOBVM is the only financial institution in Singapore to be a signatory. These principles are a global framework that provides a common market standard on managing impact investments.
Shares of UOB were trading at S$22.88 as at 11.23am on Friday, up S$0.09 or 0.4 per cent.