ING has closed what may be the first sustainability-improvement capital-call facility for Singapore-based private equity fund Quadria Capital Fund II, with the interest rate pegged to the fund’s sustainability performance, the Dutch investment bank said Friday.
The US$65 million three-year revolving sustainability-tied facility compares with a global fund finance industry alternative-asset-industry data provider Prequin estimates at US$400 billion, ING said in a statement.
The facility will peg the interest rate to a set of environmental, social and governance (ESG) targets on the fund’s investee companies and portfolio, and afterward the rate will be linked to ESG improvement, ING said.
The ESG metrics are provided by data platform B Analytics and will also use Quadria’s own ESG framework, which follows the United Nations’ Principles for Responsible Investment (PRI), and an independent materiality assessment, ING said.
“As a bank we aim to promote socially responsible behavior in the funds and fund managers we finance, so that we may influence ESG improvement in portfolio companies by incentivising their shareholders,” Herry Cho, ING’s head of sustainable finance in Asia, said in the statement.
Cho said that of the U.N. PRI signatories US$90 trillion in assets under management globally, private capital only accounts for 6 percent.
“The potential for private capital to become more ESG focused is quite significant,” she said.
Quadria Capital Management, a private-equity sponsor focusing on the healthcare sector in developing Asia, has raised most of the US$500 million Quadria Capital Fund II, which is expected to close by year-end, ING said.