Brookfield tops hard-cap target to raise USD15 billion for record net-zero fund

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Nick Evans writes that Brookfield, the world’s second largest alternative asset management firm, has raised the largest ever private fund dedicated to accelerating the global energy transition to a net-zero carbon economy with the announcement of the final close of its inaugural Brookfield Global Transition Fund with total capital of USD15 billion.

 

The Toronto-headquartered firm, which has USD725 billion of assets under management across renewable power and transition, infrastructure, private equity, real estate, and credit and insurance solutions, significantly exceeded the initial hard-cap target for the fund of USD12.5 billion – with the final fund size also being oversubscribed on the back of strong investor demand worldwide.

 

According to the firm, a diverse group of more than 100 investors from around the world committed to the new BGTF vehicle, including public and private pension plans, sovereign wealth funds, insurance companies, endowments and foundations, financial institutions, and family offices.

 

Founding investment partners Ontario Teachers and Temasek provided “major commitments” to BGTF – and will be strategically investing alongside the fund – while Canada’s Public Sector Pension Investment Board (PSP Investments) and Investment Management Corporation of Ontario also committed as “meaningful initial investors” in the fund.

 

Brookfield itself is the largest investor in the fund, underscoring the firm’s longstanding alignment of interests with those of its investors. The USD15 billion total capital raised includes investments from institutional investors in and alongside the fund, as well as amounts reserved for the group’s private wealth channel.

 

While the fund is now closed to institutional investors, it remains open to a limited number of private wealth investors through Brookfield Oaktree Wealth Solutions, which brings institutional-calibre alternative solutions to individual investors through financial advisors.

 

Brookfield said the success of the fundraise highlighted “strong industry support for decarbonisation”. Headed by Mark Carney – the former Bank of England governor who is Brookfield’s vice chair and head of transition investing – and Connor Teskey, BGTF focuses on investments to accelerate the global transition to a net-zero economy while delivering strong risk-adjusted returns for investors.

 

The fund invests in the transformation of carbon-intensive industries, as well as the development and accessibility of clean energy sources, leveraging the firm’s leadership in renewable power. Approximately USD2.5 billion has been deployed or allocated to date, spanning a range of decarbonisation technologies with investments at significant scale.

 

Said Carney: “With the global carbon budget being rapidly run down, now is the time for comprehensive, determined action. That means deploying capital across the economic spectrum from scaling clean energy generation, to transforming traditional utilities and to providing sustainable solutions for heavy industries like steel and cement. This fund provides significant scale of capital with catalytic long-term investment the world needs to help put our planet on a sustainable net-zero pathway.”

 

Teskey, who is also CEO of Brookfield Renewable, added: “Investor demand for this fund has been exceptionally strong. Our investment partners are looking for an experienced investor who can guide their contribution to what is both a critical requirement and a major global opportunity. Brookfield has been reliably investing in renewable power for decades, and we are uniquely well positioned to be both a capital provider and an operating partner to the world’s major businesses as they accelerate their decarbonisation plans.”

 

As a signatory to the Net Zero Asset Managers initiative, Brookfield is committed to the goal of achieving net-zero greenhouse gas emissions by 2050 or sooner – in line with the Paris Agreement – across all assets under management.

 

Bruce Flatt, CEO of Brookfield, commented: “We are thrilled to have this group of strategic, like-minded partners investing alongside us in the Brookfield Global Transition Fund. We all believe that private capital has a critical role to play in addressing climate change. Our collaboration reflects our shared determination to mobilise the resources of the private sector in delivering the innovative and impactful solutions required to effect change.”

 

Ziad Hindo, chief investment officer of Ontario Teachers’ said: “By making a significant commitment to the Brookfield Global Transition Fund, we are investing our capital in a way that will benefit the environment and society while also earning attractive risk-adjusted returns to pay pensions. This investment is an example of how we can use our scale, engagement, and influence to help accelerate the transition to a low-carbon economy and create a sustainable climate future. We are pleased to partner with Brookfield on this fund to strategically complement our own global infrastructure and climate-related investing activities and expertise.”

 

Added Steve Howard, chief sustainability officer of Temasek: “The global transition to net-zero emissions presents unique opportunities for investors seeking to deliver sustainable value over the long term. The partnership with Brookfield complements our strategy to invest in climate-aligned initiatives which we believe will be instrumental in accelerating carbon abatement and helping deliver on the Paris Agreement. We look forward to combining capabilities, experience, and catalytic capital to drive critical climate action at scale.”

 

 

 

 

 

 

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