Quantum Advisors, ex-officials of Tata Group join hands to launch $1 billion ESG

Quantum Advisors and former Tata Group officials have joined hands to launch $1 billion Environment, Social and Governance (ESG) Fund. It will be third domestic ESG fund.

“The joint venture will launch a $1 billion public equities fund with a distinctive style of engagement comparable to a private equity approach, to influence strategy and enhance ESG performance at India Inc. Quantum Advisors will direct the investment activities of the fund through a dedicated team of investment professionals, led by Ajit Dayal, founder of Quantum Advisors,” a joint statement said.

Investing on the basis of ESG criteria is rapidly gaining ground in international capital markets, with over $20 trillion in assets under management.

It will be third domestic ESG fund in Indian Market. SBI Mutual Fund launched first ESG fund called SBI Magnum Equity ESG Fund last year by revamping an existing fund and now has asset under management of Rs 2,111.34 crore as on December 31, 2018. Avendus Capital is also gearing up to launch an ESG fund in India.

Former Tata Group officials and other industry veterans who have partnered with Quantum Advisors include Mukund Govind Rajan (former chief ethics officer, Tata Group), Govind Sankaranarayanan (former Tata Capital chief operating officer), Alan Rosling (former Tata Sons director), Harish H V(Grant Thornton India), Shankar Venkateswaran (former chief of Sustainability at the Tata Group).

The proposed joint venture will be chaired by Mukund Govind Rajan. The fund will seek to drive higher ESG performance in Indian corporates.

“Quantum Advisors has traditionally used governance as a criterion for investment decisions. However, there are presently no ESG funds with an active engagement strategy focused on India. Yet, in comparison with other markets, the need and opportunity for higher ESG standards in India are enormous,” the joint statement said. Securities and Exchange Board of India (SEBI) requires the top 500 listed companies to publish annual Business Responsibility Reports, and this number is expected to increase, the joint statement said.

“The focus on ESG offers a new and much-needed mantra for sustainable investing and better risk weighted returns to investors. Aligning this with an active engagement style will help to push the larger agenda of improving the quality of life of the communities served by companies we invest in, and a better environment for our common future”, Mukund Rajan said.