Dedicated circular economy investment manager Circulate Capital has raised US$220 million for the first close of Circulate Capital Asia Fund II, intended to finance two million tonnes of recycling capacity in South and Southeast Asia.
Allocations from institutional investors represented more than 70% of the fund’s overall target of US$300 million and surpasses its predecessor, which stood at US$188 million.
Returning strategic corporate investors included Coca-Cola, Danone, Dow, and Procter & Gamble, joining British and French development finance institutions, the International Finance Corporation, and family office Builders Vision.
New institutional investors included the Emerging Markets Climate Action Fund, co-managed by Allianz Global Investors and the European Investment Bank, a Dutch pension fund through Achmea Investment Management’s impact platform, and public institutions from Denmark, Switzerland and Australia.
The new fund will deploy growth capital to scale circular supply chains and recycling businesses in markets including Indonesia, Thailand, Vietnam, the Philippines, and Malaysia, with a focus on plastic solutions and packaging, as well as electronics and apparel.
Typical circular solutions and projects include scaling mature plastic recycling streams, building nascent markets for other plastic materials, and recovering critical and rare earth materials trapped in recyclable electronics and batteries.
According to the 2024 Circularity Gap report, the global economy that extracts over 100 billion tonnes of raw materials annually but remains only 7.2% circular, leaving supply chains highly exposed to price fluctuations and material shortages.
Circulate Capital said circular supply chains represent a “compelling” investment opportunity for institutional investors and a strategic necessity for the industry, underpinned by regulatory changes, supply chain volatility, and consumer brand commitments.
“The circular economy is no longer just a subset of ESG or sustainability. It is a sophisticated asset class that can deliver liquidity to private equity investors. With Fund II, we are ready to scale and capture the massive growth potential inherent in these high-velocity economies, to build businesses that deliver financial and impact returns for our investors,” said Founder and CEO Rob Kaplan.
The firm has added nearly 900,000 tonnes of annual collection and recycling capacity across its Asia portfolio since 2020.
