Singapore-based private equity firm Heritas Capital has launched a $50-million impact fund, seeking to back 10-15 innovative and high-growth social enterprises across Asia.
The vehicle, Asia Impact First Fund (AIFF), will look for social businesses “with a clear and demonstrated social and/or environmental impact, and viable business growth plans”, Heritas Capital said in a statement. While it targets the impact sector, the firm added that it hoped to generate “fair market returns” for its investors.
The firm expects to achieve a first close for the vehicle by the end of this year.
The impact fund follows the launch of Heritas Venture Fund II and Heritas Growth Fund III last year. The funds are in line with Heritas Capital’s strategy of building a multi-fund impact investment platform.
In June 2021, Heritas Capital held a $60-million first close of its third growth fund, which targets a corpus of $150 million. In November, the firm reached a first close of $10 million for the Heritas Venture Fund II, which invests across the seed and Series A stages.
Heritas Capital had $250 million in assets under management by the end of 2021, according to the firm’s 2021 annual impact report. It has invested over $200 million into more than 40 companies. These businesses have gone on to raise follow-on funding totalling $500 million.
Heritas Capital has backed companies in the healthcare, food and education sectors across Asia including Alchemy Foodtech, BHL Education, JioHealth, MFine, Hummingbird Bioscience, Cakap and ConveGenius.
There are as many as 3 million social enterprises across Southeast Asia and India, the firm said, citing British Council reports. These are often young, small yet high-growing businesses, and tend to be more gender-inclusive in hiring.
“More than 90% of the social enterprises surveyed in the reports face financing constraints, especially barriers to accessing investors, who are essential funders to help them grow beyond grant financing. Recognizing that recent funding conditions have deteriorated in line with a slowing global economy, AIFF seeks to provide catalytic funding to support social enterprises in their business and impact growth, hence sustaining and growing their beneficiary base,” Heritas Capital said.
SE Asia has seen a spate of fund managers focused on making impact investments in the region, such as ADB Ventures, Insitor Partners, Patamar Capital, Leapfrog Investments and ABC World Asia, among others.