ESG First Fund to help emerging mid-market businesses scale in a global market

Aavishkaar Capital announced the launch of the ESG First Fund, a US$ 250 Mn fund focused, firstly, on strengthening the Environmental, Social and Governance (ESG) practice of mid-market businesses to help them scale to access new markets where consumer demand for goods and services produced is in an environmentally & socially sustainable manner. The fund is in partnership with KfW.

  • E Environmental

  • S Social

  • G Governance

Why an ESG Focussed Fund

World over, climate change and social inclusion are changing consumer behavior and driving regulatory change expedited further by the global pandemic.

This creates a significant investment opportunity to back companies having environmental and social considerations at the core of their business strategy to meet the demand of today's global consumer.

  • Public concern for climate & the environment has risen globally

  • Demand for sustainable goods & gender equality is increasing

  • Businesses have been forced to listen

  • Governments have taken more responsible stand on climate change, environment and sustainability

  • Climate & the environment mean business

About the ESG First Fund

The ESG First Fund will look to provide transformational capital which can invest across the capital structure, helping businesses improve their ESG standards so that they capitalize on the increasing consumer preference for ecologically conscious, gender equal and purpose driven businesses.

Leveraging on the global drive for sustainability and equality, the ESG First Fund is a US$ 250 Mn fund focused on investing in Africa and Asia with the mandate of generating superior ESG outcomes and commercial financial returns alongside positive social impact.

Key ESG Focus Areas

  • Environmental

  • Social

  • Governance

More about the Fund

The ESG First Fund will look to provide transformational capital which can invest across the capital structure, helping businesses improve their ESG standards so that they capitalize on the increasing consumer preference for ecologically conscious, gender equal and purpose driven businesses.

We consistently look for investments with the following attributes.

  • Strong ESG Focus

  • Proven & resilient Business Model

  • Significant Competitive Advantage

  • Experienced Management Teams

  • Fit with Portfolio Construct

We are looking For:

The fund aims to partner with mid-market businesses and enterprises committed to enhanced ESG standards in their business operations.

If you are an entrepreneur who compliments our vision write to us - esgfirst@aavishkaar.in

Agriculture & Allied

  • Businesses exporting fresh or processed fruits & vegetables and meat & fish
  • Businesses exporting horticulture products, leather, sericulture products
  • Value addition businesses producing refined oil, jams, coffee, tea , cocoa, spices, etc.

Apparel & Textile

  • Business supplying textile fabrics to manufacturing companies
  • Apparel manufacturing companies
  • Businesses exporting raw materials to apparel manufacturing companies
  • Businesses exporting handicrafts

Selective Export Businesses

  • Businesses providing logistics and warehousing services for export
  • Selective businesses in phama, auto parts, light manufacturing and tourism

Value Add

Enhancing the ESG profile of businesses in emerging markets

  • The dive for sustainability and equality globally represents an opportunity for companies in emerging markets that adopt ESG principles
  • The ESG First Fund will help businesses in emerging markets to proactively identify ESG risks and will build and operationalize action plans to addresses these risks capitalizing on the opportunity ESG compliance presents

Providing flexible capital by investing across the capital structure

  • Due to the limited number and range of investors in emerging markets and because businesses need a blend of equity, quasi-equity & debt, the ESG First Fund would look to invest across the capital structure
  • Moreover, debt and equity like instruments would provide a combination of fixed returns and equity returns significantly reducing risk and maximizing upside

Opportunity to build local champions

  • The ESG First Fund would look to support businesses with flexible capital helping them build their ESG standing and enabling them to compete globally
  • This creates 'local champions' i.e. national or regional leading ESG compliant export business resulting in an enhanced potential for exits to larger PE houses and strategic investors

Investment Thesis

The Fund is the first global fund with a south-south investment mandate with an investment process centred around ESG from investment to portfolio management to exit. In addition, the fund would focus on gender equality and climate change goals [COP26], with an ambition to grow mid-cap enterprises by deepening and gaining access to evolved export markets.

ESG First Fund Team

  • Ashish Patel

    Managing Partner

  • Abhishek Mittal

    Partner

  • Darren Lobo

    Investment Manager

  • Nicol Moraa

    Investment Analyst

  • Sowmya Suryanarayanan

    Impact & ESG Lead

Our Fund Partner

kfw

KfW Development Bank has been helping the German Federal Government to achieve its goals in development policy and international development cooperation for more than 50 years. In this regard, KfW is both an experienced bank and a development institution with financing expertise, with expert knowledge of development policy and many years of national and international experience. On behalf of the German Federal Government, and primarily the Federal Ministry for Economic Cooperation and Development (BMZ), KfW finance and support programmes and projects in developing countries and emerging economies – from their conception and execution to monitoring their success. KfW’s goal is to help their partner countries fight poverty, maintain peace, protect both the environment and the climate and shape globalisation in an appropriate way.

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