Instead of jumping around the different elements of "ESG", this Singapore-headquartered investment house has one focus: reducing C02 output and its impact on the world. It recently forged a partnership with a New Zealand-based venture capital firm.

When the decarbonisation investment specialist firm TRIREC signed a partnership a few weeks ago with New Zealand’s Pacific Channel – a venture capital firm – it showed how far Singapore-based TRIREC had come in the past eight years.

Mike Lim, partner at TRIREC, argues that the business has plenty of forward momentum and its strategy of focusing on the “E” in the ESG field, rather than a range of areas, was bearing fruit. 

“At the end of the day this is about performance, and more importantly, backing exceptional founders and companies to overcome the challenges of entrepreneurship. And of course, realising visions that can contribute to climate change,” Lim told this news service during a recent meeting in TRIREC’s offices in Singapore. 

The firm does not have a fixed approach in measuring ESG impacts of its start-ups – these tend to be not very useful in the start-up space, he said. While they have a preference at looking at the Pre-Series A and Series A rounds of firms, but they exercise flexibility as to when the investment periods will be, he said. 

“We tend not to take early-tech risks as we look at firms that has gone beyond the lab stage and is on the verge of going to the market. We have some flexibility, and we can go a bit earlier or later,” Lim said. 

TRIREC, with about $150 million of assets under management and launched in 2015, has 20 portfolio companies across two pools of capital. Its portfolio companies focus on five clear decarbonisation verticals namely: Food and agriculture, mobility, buildings, industries, and energy. The ascent of such firms is part of a broader drive around “green transition” investment firms and products that have become almost a commonplace of banking and finance.

TRIREC has a particular stance in standing out from the pack.

“Our preference is to take a minority stake, and we generally try to keep our stake below 25 per cent. Our level of investment and stake in our portfolio companies is carefully determined based on a thorough understanding of their specific needs and requirements. By taking this personalised approach, we can foster a strong and mutually beneficial relationship with our portfolio companies,” Lim said.

Lim said while the duration of stake-holding can vary depending on a number of factors such as the nature of the industry and the growth trajectory of the business, TRIREC’s typical holding period for ranges between three to six years. 

Wealth engagement
Since 2015, TRIREC has had a lot of investment engagement from high-net-worth individuals and family offices. For its second TRIREC fund, it counts several Asia-based corporations as limited partner, who all want investment opportunities in the decarbonisation sector. For example, TRIREC recently announced its new Co-GP late-stage VC decarbonisation fund in partnership with Innopower, which is a joint venture comprising three of Thailand's largest electricity generation companies. 

Much of TRIREC’s investors come to it via word of mouth and networking. The firm has, however, become more active in developing its profile, Lim said. That is part of its plan to sustain and grow the investor base, and in response to interest from larger investors such as institutional asset allocators.
 

Down under
And the deal with Pacific Channel shows the TRIREC message is growing.

Lim said he met a group of New Zealand Start-ups at Cleantech Forum Asia in 2022 and was “very impressed” by the quality of the start-ups, including Pacific Channel’s work and what it was doing in New Zealand.

“We thought we needed a more formal way of coming together,” he said. Pacific Channel did not have TRIREC’s geographical reach and network, and TRIREC wanted to obtain the expertise that Pacific Channel had to offer.

The New Zealand government demonstrates strong support in this space by providing funding to research institutions, facilitating direct investments, and promoting investment in NZ’s VC funds focused on the deep tech domain, Lim said. Although the funding ecosystem in NZ is relatively young and has comparatively smaller cheque sizes compared to more established ecosystems like that of the US, it still nonetheless displays great potential, he continued.

“TRIREC does have peers that do what it does”, Lim said. There are a few decarbonisation-focused early-stage VC funds in Asia; however, most tend to be more general tech VCs with climate as an add-on to their investment mandate. 

“The uniqueness is that the founders of TRIREC understand what it is like to be an entrepreneur, having been through the same journey ourselves,” Lim said. All of the three TRIREC senior members of the team (including Melvyn Yeo and Lawrence Wu), forged their paths either in the banking sector or as successful business owners. They have not only initiated these ventures, but have also navigated them to leadership positions in their respective industries, culminating in successful exits.

“We believe strongly in collaboration. It is not about competition all the time. The best way to solve climate change is to work with others rather than try and do everything ourselves,” Lim said.
WealthBriefingAsia touched on the sensitive topic of whether some of the rhetoric of “Net Zero” – and the political and economic angst around it at times – was more a hindrance than a help. 

“Decarbonisation is perhaps the most obvious route toward mitigating the effects of climate change. By reducing, preventing or sequestering greenhouse gas emissions, we can limit global warming and the associated risks with it,” Lim said. The rhetoric around Net Zero can be a powerful tool in driving change by setting ambitious targets and providing a clear direction for emissions reductions,” he said. 

"However, it is important to ensure that such rhetoric is backed by concrete and clear actions and policies. Some concerns with the Net Zero approach include the potential of greenwashing, where organisations or governments claim to be taking action while continuing with business-as-usual practices. There is also a risk of relying too heavily on unproven or speculative technologies to achieve Net Zero targets, without sufficiently focusing on immediate but incremental emission reductions,” Lim continued. “It is therefore essential to complement the rhetoric with robust policies, investments, accountability, pragmatism, and collaboration. Ultimately, a holistic and all-hands-on approach is needed to achieve a sustainable and low carbon future.”