Sustainability is becoming an integral part of due diligence in venture capital, and Vulpes Investment Management is taking a hard look at its portfolio and investment processes, said Stephen Diggle, founder of the family office-backed firm.
“There may be changes in the portfolio,” Diggle said in an interview with DealStreetAsia. “And there may be a change in emphasis.”
The firm is now in the process of raising its third VC fund, and is expected to make the first investment from the fund this month.
To ensure that its investments adhere to sustainability principles, Vulpes has recently appointed Sadiq Currimbhoy to the firm in a newly-created role of Head of Sustainability.
Currimbhoy, who was formerly Head of Sustainability at Maybank Kim Eng Securities in Singapore, is undertaking an audit assessment of Vulpes’s existing investments.
Diggle believes there is “enormous scope” in Asia to invest sustainably for the long term, and that family offices and family-run businesses have an advantage in their ability to invest in sustainability and for the long term.
In Asia, in particular, there is a significant opportunity to improve the ‘G’ in ESG, or governance.
“Governance issues continue to be the single biggest destroyer of wealth and the biggest problem in the region,” Diggle said. “If governance got better, everyone would be better off; return on equity and capital would be higher. Growth would be higher. There’s no trade off there.”
Vulpes’s VC portfolio has focused on digital businesses. It was an early investor in proptech company PropertyGuru, and retail tech unicorn Trax, and has since partially exited both investments. Other companies in its portfolio include restaurant reservation platform Chope, Australian telemedicine startup Rosemary, and enterprise services platform Qwikwire.
Last June, Vulpes launched a Special Opportunities Fund targeting companies affected by the COVID-19 crisis. There have been 21 investments made from the fund, including in New Zealand-based investment platform Sharesies, and Vietnamese delivery platform Loship.
Separately, Vulpes has a fund management partnership with US-based Patamar Capital.
Edited excerpts of the interview:-
