Hong Kong-based private credit manager ADM Capital is looking to raise around $200 million for an impact fund targeted at Indonesia, according to a company statement on Tuesday.
The announcement confirms a report by DealStreetAsia in June that said ADM Capital is in the market to raise a climate fund that would invest in Indonesian small and medium enterprises (SMEs).
So far, the new fund has secured seed commitments from London-based single-family office Ceniarth, the David and Lucile Packard Foundation, MacArthur Foundation, Margaret A Cargill Philanthropies, and the Hong Kong family office RS Group, per the statement.
Dubbed the Asia Climate-Smart Landscape Fund, it aims to address the significant funding gap for SMEs engaged in sustainable agriculture, agroforestry, and aquaculture by providing lending.
ADM is seeking to fill a structural credit gap in the Indonesian market, where SMEs struggle to access finance given the perceived risk, smaller amounts and longer tenor needed, with medium- to longer-term lending in smaller ticket sizes, in the $5-20 million range, according to its website.
The U.S. International Development Finance Corporation will be providing a 50% guarantee across the fund at the asset level. The United States Agency for International Development, Rabo Foundation, and the Australian Government’s Department of Foreign Affairs and Trade are also participating in the guarantee.
Established in 1998, ADM Capital manages roughly $2 billion on behalf of its global institutional client base, and has invested $6 billion across 220 loans.
Several impact and climate funds have closed this year targeting Southeast Asia or the larger Asian region. Most recently, Singapore’s Wavemaker Impact closed its debut fund at $60 million this week. Meanwhile, global impact fund manager LeapFrog Investments secured commitments from Temasek and the European Investment Bank (EIB) for its $500 million Asia- and Africa-focused climate strategy.
