Singapore-based investor Circulate Capital, which finances companies that recycle plastics and develop eco-friendly packaging, has raised US$220 million (RM885.94 million) for its second Asia fund, despite a global slowdown in ESG-focused investment.
The first close of Circulate Capital Asia Fund II brings the firm’s total assets under management to US$480 million, according to CEO Rob Kaplan. The new fund is supported by Builders Vision, the family office of Walmart founder Sam Walton’s grandson, existing corporate investors such as The Coca-Cola Co, and new institutional backers including the Emerging Markets Climate Action Fund, co-managed by Allianz Global Investors.
The raise comes amid a challenging year for ESG funds, with many seeing significant outflows, underscoring Circulate Capital’s focus on combining financial returns with environmental impact. Chris Wu, vice-president of Builders Vision, said, “Financial performance and impact aren’t trade-offs—they should go hand-in-hand. With Circulate, we saw an opportunity to achieve strong market-rate returns while driving meaningful environmental outcomes.”
Circulate Capital Asia Fund II aims to reach US$300 million by the end of 2026, targeting net internal rates of return of around 20%. The fund will invest in companies across South and Southeast Asia, with average investment sizes of US$15–25 million. While plastics recycling remains the core focus, the fund will also explore other circular economy sectors, such as sustainable fabrics and packaging.
Since launching its first Asia fund in 2019 with over US$100 million, backed by major plastics producers and users including Dow Inc and Chevron Phillips Chemical Co, Circulate has expanded with additional funds targeting Asia and Latin America.
Kaplan emphasized that partnering with major corporations, even those contributing to plastic waste, is essential to addressing the problem effectively. Circulate supports investee companies in aggregating and processing plastic waste, connecting them with buyers of recycled goods. Notable portfolio companies include Srichakra Polyplast Pvt Ltd and Thailand’s Union J Plus.
