While political action on climate change is slow, some of the world’s largest private equity investors are doubling-down on climate-action with big positions in climate-tech. 

A number of multi-billion-dollar funds have been announced in the US in past weeks, and it’s no coincidence that they’ve all been spawned at the same time. The movement for change is gaining momentum as a confluence of extreme weather brings home the reality of a planet out of balance. 

Early movers in the space leveraged infrastructure and alternatives skills to help build solar and wind farms. But today’s private equity investors are taking a more nuanced approach to the decarbonisation of our economies, making bets on the innovative technologies that could very well revolutionise the future of electricity generation, supply chains, food production and transport. 

More climate funds have been closed in the first half of 2021 than were raised in the previous 5 years combined, according to Pitchbook data. 

US Investors Leading the Way

TPG has announced the first close of the TPG Rise Climate fund at $US5.4 Billion. It has a hard-cap of $7 Billion, and hopes to close by the end of the year. The TPG Rise brand was first launched in 2016 as a global impact investment vehicle, and was notable as one of the first private equity investors to launch a billion-dollar impact fund. The launch of TPG Rise Climate benefits from this foundation, with an experienced team backing them, as well as services such as Y Analytics, the in-house impact measurement platform. 

Alternatives manager Brookfield has made an initial close of $US7 Billion on the Brookfield Global Transition Fund. They’ve cited a hard-close of $US12.5 Billion, making it the biggest fund in the sector. It’s focussed on companies driving the transition to a net-zero carbon economy, with founding investors including Ontario Teachers and Temasek. The fund is co-lead by Mark Carney, who’s also the firm’s co-chair. 

General Atlantic is a private equity firm focused on ‘Growth Equity’. They’ve reportedly raised $US4 Billion to fund a new investment vehicle called BeyondNetZero, which will invest in innovative growth companies targeting: decarbonization, energy efficiency, resource conservation and emissions management. The group will be chaired by Lord Browne of Madingley, who was CEO of BP until 2007. 

Funding Australian Climate Innovation

Australia has its own suite of up-and-coming climate tech investors who recognise both the opportunity and the impact of supporting early-stage innovators in climate technology. 

Main Sequence Ventures was founded by the Australian Government’s leading science agency, CSIRO, in 2017. It currently manages around $AU490 million, and it’s recently raised a second fund, pulling in $250 million. The firm is focussed on commercialising technologies developed by its scientists and researchers, and with this second fund, they’re focussing on climate tech. 

“We are entering a transformational and critical decade for addressing climate change globally; Australia has a natural opportunity to develop the solutions that help everyone forge a path to net zero,” Says Martin Duursma, Main Sequence Partner. “Our ingenuity and deep science background as a nation will be pivotal in building a clean hydrogen industry, adapting heavy industry, decarbonising our energy grids, and developing new ways to capture and sequester carbon. We’re determined to help uncover the scientific discoveries, turn them into real, tangible technologies and accelerate their potential so we can reverse our climate impact and avoid a climate catastrophe.”

SDGx is a deep-tech VC firm that’s recently launched a $100 million fund to find the next breakthrough technology and help bring it to market. The deep-tech approach offers patient capital that understands truly transformational technology needs time and resources to grow. They offer capital, but also subject-matter expertise and a unique network of commercial and industrial partners. 

Artesian invests in both VC and fixed-income, which may seem an odd combination, but when it comes to impact, it makes sense. Both asset classes lend themselves to an impact lens. The firm launched the ​​Clean Energy Seed Fund in 2016, and along with the federal government’s Clean Energy Finance Company, it raised $26 million which has been deployed to support some of the country’s most exciting startups.

Leave a comment

Your email address will not be published. Required fields are marked *