Asset owners throw weight behind $12.4bn fundraising drive for green private equity

Mark Carney’s Brookfield Global Transition Fund and Hank Paulson’s TPG Rise Climate both announce first close

The UK’s Universities Superannuation Scheme (USS), Ontario Teachers’ Pension Plan Board and Singapore’s sovereign wealth fund Temasek are among the names to have poured $12.4bn into two private equity ‘mega funds’ dedicated to sustainable investing. 

Canadian alternatives giant Brookfield announced first-close on its Global Transition Fund yesterday, raising $7bn. The fund, which will be led by Brookfield’s Head of Transition Investing and ex- Governor of the Bank of England, Mark Carney, secured backing from Canadian investors Ontario Teachers, PSP Investments and Investment Management Corporation of Ontario, as well as Temasek. Brookfield itself is the largest investor in the fund. 

Connor Teskey, CEO of Brookfield Renewables, will run the fund with Carney. It will focus on “investments which accelerate the global transition”, targeting opportunities related to reducing GHG emissions and energy consumption, as well as increasing low-carbon energy capacity and supporting sustainable solutions.

Yesterday also saw US-based private equity giant TPG announce first-close on its Rise Climate Fund, bagging $5.4bn from Ontario Teachers, USS and public pension funds in Ohio, Michigan and Washington State. Other investors included AXA, the $430bn Saudi sovereign wealth fund and 20 large corporations including Alphabet, Apple, Nike and Smithfield Foods.

The strategy will be run through TPG’s Rise Fund – an SDG-focused vehicle created in a 2016 partnership with Bono, the frontman of rock band U2, and billionaire philanthropist Jeff Skoll, who was the first president of online retailer eBay. The climate strategy’s first close has almost doubled TPG Rise’s AUM to $11bn. 

It will be chaired by former US Treasury Secretary Hank Paulson, and managed by TPG’s Executive Chairman Jim Coulter. 

TPG Rise Climate will invest in multiple asset classes, including growth equity and value-added infrastructure, across five climate subsectors: clean energy, enabling solutions, decarbonised transport, greening industrials, and agriculture and natural solutions. 

Brookfield and TPG Rise have established hard caps of $12.5bn and $7bn for their respective funds. Brookfield said that it expected a “traditional first and second close, with additional capital from […] institutional investors” to occur over the course of 2021, with TPG expecting a final close in Q4 2021.