AZALEA Investment Management has launched a sustainability fund, which will be co-seeded with Singlife with Aviva.

The fund, the Altrium Sustainability Fund 1, will invest in ESG-focused (environmental, social and governance) opportunities to achieve positive social and environmental outcomes alongside private equity (PE) financial returns.

Azalea Group and Singlife with Aviva have each committed US$50 million to kickstart the fund.

ASF 1 is a PE equity fund of funds. It will back funds which invest in scalable, commercial solutions to solve pressing issues across 5 core themes - climate, resource management, healthcare, education and financial inclusion.

Azalea will select "high quality'' managers for ASF1, that address the global challenges reflected in the United Nation Sustainable Development Goals. The fund will mainly focus on buyout and growth strategies.

Azalea Investment Management is the management arm of the Azalea Group, which is part of Temasek. Azalea has developed products that seek to open up access to PE investments. The Altrium programme allows accredited investors to co-invest with Azalea.

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Azalea is also the sponsor and manager of the Astrea platform, which seeks to enable retail investors to get exposure to PE.

Azalea chief executive Margaret Lui said: "Private equity is uniquely positioned to be a force for good through its long-term investment horizon and innate appetite for value creation. Investing through a sustainability lens not only builds a forward-looking portfolio, it also assures enduring value, thus enhancing the likelihood of resilient returns... We're very pleased to have like-minded investors like Singlife with Aviva join us on this journey.'' Azalea recently became a signatory to the UN Principles for Responsible Investments (UNPRI).

Pearlyn Phau, group chief executive of Singlife with Aviva said: "As a homegrown financial services brand we also want to contribute to Singapore's net-zero goal by 2050. In addition to measuring the carbon footprint of our global investment portfolio, we're actively seeking responsible investment opportunities...''

Singlife recently seeded 2 sustainable funds and aims to continue to pursue ESG-focused investments. The firm supports the Task Force on Climate-related Financial Disclosures and is working to become a signatory of the UN PRI by Q4 2022.