APG, on behalf of its pension fund clients ABP and bpfBOUW, has invested in the Environmental Opportunities Fund (EOF). The fund, managed by Australian investment manager Adamantem Capital (Adamantem), has reached its target of AUD 350 million. Shirley Ma, APG’s Senior Portfolio Manager for Private Equity (Asia-Pacific), discusses the characteristics of this deal.
Published on:
9 April 2025
In a nutshell
• The Environmental Opportunities Fund is APG’s first impact fund investment in the Asia-Pacific region.
• Adamantem will report to APG in alignment with APG’s impact reporting framework and has agreed to join the ESG Data Convergence Initiative (EDCI).
• While private equity funds in APAC seek both environmental benefits and financial returns, they often lack the necessary frameworks for impact investments.
EOF pursues investments in businesses that support the transition to a net-zero economy or other environmental trends, including clean energy and electrification, natural capital and abatement, and a circular economy.
What are some examples of companies the fund invests in?
“One example 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.”
What does APG contribute, besides the capital itself?
Our capital contribution is well underpinned by a clear theory of change, but there’s more to it. We had engaged with the fund manager for more than a year before making the investment. 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. Among the multiple achievements, the most significant was that they have agreed to report to us in alignment with our impact reporting framework in relation to the KPIs and objectives of the investment. Our clients want that information, and it makes our communication with them much easier.”
Did APG have a role in promoting industry initiative for this investment?
Together with other Limited and General Partners in the market, APG is one of the founding partners of the ESG Data Convergence Initiative (EDCI)—a global partnership of private markets stakeholders committed to streamlining the industry’s historically fragmented approach to collecting and reporting ESG data. We encourage our General Partners and funds to participate in the initiative, and for the case of Adamantem, we helped connect the firm with EDCI to clear some of the technical hurdles which had been preventing Australian private equity fund managers to participate in the program. As a result, Adamantem has agreed to join the EDCI and I believe more Australian managers will follow suit.”
What are other challenges that come with this kind of investment in the Asia-Pacific region?
“As far as ESG and impact investing are concerned, Europe is in a leading position. Within APAC, the investable universe for APG is very limited, although Australia is definitely a more mature market than the rest of Asia. While the trend towards a healthier environment is a global one and many private equity funds are interested in the related opportunities, the challenge is that many only look at 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.”
Is there a way to overcome this, or is it just a question of time for the market to further develop?
“It will definitely take some time. 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. That kind of dynamics helps develop the market. What also contributes is that we as APG are regarded as one of the most significant institutional players with rigorous underwriting standards. Private equity firms may see having APG in their investor base as a testimony of reaching a certain quality and standard. The fact that we are present in the region, active and quite vocal about our requirements might help push the industry in the direction we want it to go.”