Azalea holds USD 100m first close for sustainability fund-of-funds

Harriet Matthews
30 March 2022

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Singapore-headquartered Azalea Investment Management has held a first close or its debut ESG-focused fund-of-funds, Altrium Sustainability Fund I (ASF I), with initial commitments of USD 50m each from the Azalea Group and Singlife with Aviva.

The GP said in a statement that the fund aims to achieve positive environmental and social impact, as well as generating PE market financial returns.

Azalea Investment Management was formed in 2015 and is the investment arm of Azalea Group, which is wholly owned by Temasek-backed Seviora Holdings. Azalea signed the UN's Principles for Responsible Investments (PRI) in 2021 and is also part of the UN Environment Programme (UNEP) Finance Initiative and the UN Global Compact initiative. The firm said in the same statement that it has also signed up to the ESG Data Convergence project, backed by LPs and GPs including Calpers and Carlyle.

The firm held a final close for Altrium Private Equity Fund II, the second vehicle in its flagship fund-of-funds strategy, in December 2021, as reported.

Investors
The Azalea Group and Singlife with Aviva have each committed USD 50m to the fund. The vehicle is expected to attract further commitments from institutional investor, as well as other accredited investors, according to the same statement. "We welcome like-minded investors to join us in driving impact in the PE space through ASF," a spokesperson for Azalea Asset Management told Unquote.

Investments
ASF I will target funds in the US and Europe, with potential opportunistic exposure to emerging markets. The vehicle aims to back managers who both invest in companies that incorporate ESG into their business decisions, and also show a commitment to creating lasting positive environmental and social impact, according to the same statement.

The fund has already made two commitments, the spokesperson said, adding that the fund has a "good pipeline" and expects to make 10-15 primary fund deals in total. Deployment is expected to take place over the next two years, they said, with the average ticket size ranging from USD 10m-20m.

People
Azalea Investment Management – Margaret Lui (CEO).

[Editor's note: Subsequent to publication, the headline has been amended to include the first close amount, and the article has been updated post-publication to add comments from Azalea Asset Management.]