Mumbai: Avendus Capital Public Markets Alternate Strategies, the alternative asset management arm of Avendus Capital, Thursday said it will launch an ESG (environment, social and governance) fund.

ESG investing constitutes investments that while seeking positive returns, also consider and evaluate the long-term impact that business practices have on society, the environment and the performance of the business itself.

The fund is likely to be launched by end of November and Avendus is targeting to build assets under management (AUM) of up to $1 billion over the next three years.

The alternative asset management arm of Avendus has two other funds—the Avendus Absolute Return Fund and the Avendus Enhanced Return Fund.

For the ESG focused fund, Avendus has tied up with Institutional Investor Advisory Services (IiAS), a Sebi registered research firm. IiAS will put in place a ranking framework covering ESG principles, the statement said.

Abhay Laijawala, who has recently joined Avendus from Deutsche Securities, will be the lead fund manager.

“With US-based institutional investors increasingly incorporating ESG considerations in investment decisions, foundations and endowments are integrating ESG strategies at a rapid pace," said Laijawala, managing director and fund manager at Avendus Capital Public Markets Alternate Strategies.

Rakesh Mohan, a former RBI deputy governor and Amit Tandon, co-founder and managing director of IiAS, will be on the fund’s advisory board.

“Over the past couple of years, Indian corporates have increased focus on governance practices. As governance levels continue to improve, several Indian companies are starting to take a more holistic approach and are focusing on becoming responsible corporate citizens. As a result, we expect ESG to becomes a much bigger focus of Corporate India in the next 18-24 months," said Amit Tandon, co-founder and managing director at IiAS.

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