Circulate Capital raises US$220 mn in second fund for Asian recycling

Singapore-based circular economy investment manager Circulate Capital has bucked global fundraising trends to raise US$220 million for the first close of Circulate Capital Asia II fund. This represents more than 70% of the fund’s overall target of $300 million and already surpasses Fund I, which stood at US$188 million.

It adds that the fund will now deploy growth capital to scale circular supply chains and recycling businesses across South and Southeast Asia, with a focus on plastic solutions and packaging, as well as electronics and apparel.

A diverse group of global investors, including strategic corporates, Development Finance institutions (DFIs), and institutional and family office LPs, drove this latest fundraise, it states.

Returning corporates such as Coca-Cola, Danone, Dow, and Procter & Gamble reaffirmed their commitment to the strategy for Fund II, joining existing DFIs British International Investment, the French DFI Proparco, and the International Finance Corporation (IFC), along with leading family office Builders Vision.

The fund’s momentum accelerated with a robust cohort of new institutional partners. These include the Emerging Markets Climate Action Fund (EMCAF), co-managed by Allianz Global Investors and the European Investment Bank, as well as a Dutch pension fund through Achmea Investment Management’s Impact Platform, and public institutions such as Impact Fund Denmark (IFDK), the Swiss DFI SIFEM, managed by responsAbility Investments AG, and Australian Development Investments (ADI).

The investor base was further diversified by high-profile family offices and impact investors, including Stella (the investment entity of the Heinz Hermann Thiele family foundation), Clotho Family Office, Netherlands-based impact specialist Wire Group, and Fondation Prince Albert II de Monaco.

To capitalise on this opportunity, Fund II will execute high-growth investments in key markets such as India, Indonesia, Thailand, Vietnam, the Philippines, and Malaysia.

Real-world examples include:

- Scaling mature plastic recycling streams, such as PET;

- Building nascent markets for other plastic materials, including polyolefins;

- Driving innovation in alternative paper-based packaging solutions;

- Recovering critical and rare earth materials trapped in recyclable electronics and batteries.

Circular supply chains are increasingly recognised as 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. This urgency is grounded in a 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.

As a result, the investment requirement to bridge this gap is immense; plastics alone represent a US$100 billion opportunity for cumulative investment in collection and recycling infrastructure by 2030. Governments also increasingly recognise that circular supply chains represent a mainstream pathway to economic growth and independence.

Rob Kaplan, Founder/CEO of Circulate Capital, said, “Circulate Capital is the first and only private markets manager to bet exclusively on circular supply chains across South and Southeast Asia. Our track record of successful exits demonstrates that 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.”

Circulate Capital says it has executed more deals within the circular economy in Asia than any other manager. The strategy has a strong track record of capturing dual-track growth, serving surging domestic demand while institutionalizing operations to meet the standards of multinational customers. Since 2020, the firm has added nearly 900,000 tonnes of annual collection and recycling capacity across its Asia portfolio.

This approach continues to deliver financial returns, evidenced by Fund I’s recent full exit from Recykal, an India-based digital waste management platform. The firm also completed partial exits from Lucro, India’s leading recycler specialized in difficult-to-manage flexible plastic packaging, and Srichakra Polyplast, India’s first food-grade plastic recycler.

Fund II will aim to finance nearly 2 million tonnes of collection and recycling capacity. Over ten years, these investments are projected to prevent a cumulative 30 million tonnes of unmanaged waste; avoid or reduce more than 50 million tonnes of CO2 emissions, with at least 50% of the portfolio aligned to 2x gender smart investing targets on exit.

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