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Walking the Talk: Embedding Impact in BCP Asia Fund II

Talk is cheap.

At Bintang Capital Partners we know it’s always harder to walk the talk.

Bintang’s Adelene Low and Jacqueline See recently spoke at length with Katrina Lau from Private Equity International about Bintang's impact strategy for our upcoming second fund, BCP Asia Fund II (“BCPAF II”).

Our “North Star”?

Setting hard baseline requirements for a significant proportion of BCPAF II’s portfolio companies to achieve B Corp certification, and by doing so signaling our genuine commitment towards creating social and environmental impact.

To ensure alignment with Bintang’s impact goals, Bintang plans to implement a unique 'carrot and stick' mechanism for BCPAF II.

BCPAF II marks a significant step for Bintang as legal measures are introduced to solidify our commitment to impact.

In the event an investee fails to obtain B Corp certification within 2 years of investment, an equity clawback mechanism is triggered in Bintang’s favor creating a real and powerful incentive for investees to prioritise impact goals.

This strategy not only filters out potential investees who aren’t fully aligned with Bintang's mission, but also safeguards against greenwashing through financial penalties for breaches of Bintang’s impact mandate.

Additionally, if investees in BCPAF II fail to achieve B Corp certification, the additional capital returned via the equity clawback mechanism can be redirected by Bintang's LPs to other impact investments.

Our approach of introducing an "impact guarantee" framework is to protect our investors against impact-related downside while preserving Returns on Impact (“ROI+”), alongside financial Returns on Investment (“ROI”) protections (where the more commonly applied “profit guarantee” frameworks are used).

Bintang is also aligning our carried interest with impact targets: if BCPAF II fails to achieve a minimum threshold of B Corp certifications amongst its portfolio companies at the point of investment exit, carried interest payable to Bintang will be reduced.

Understanding that achieving B Corp certification may take time (and some effort), Bintang views a pre-investment B Corp score which is below the passing mark as an opportunity for growth for investees rather than an outright dealbreaker.

To ascertain where a company is on their impact journey, Bintang first performs Sustainability Due Diligence to assess their initial B Impact Score and potential areas of impact opportunities.

An impact value creation plan is then formulated for each investee based on B Lab’s B Impact Assessment framework.

To support investees on this journey, Bintang often seconds a member of our team into the portfolio companies where impact creation initiatives are a core goal.

In ASEAN, impact may not be an immediate priority for all companies.

However, Bintang believes for those who think that impact is important, B Corp certification is a potential pathway towards embracing the principles of sustainability.

Thus, we are committed to finding, funding and helping mid-sized companies who want to take their first steps towards creating long lasting impact.

Check out the article by PEI here: Katrina did an amazing job of capturing our viewpoints!”

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