TPG Closes Climate Funds at $10.4 Billion

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Alternative asset manager TPG has announced the final close of two climate-focused strategies, Rise Climate II and the Global South Initiative. Together with related vehicles, they raised $10.4 billion.

The Global South Initiative hit its target of $2.5 billion in commitments. TPG said 31% of the commitments to the climate funds came from investors that are new to the firm.

TPG CEO Jon Winkelried said: "Our clients recognize the powerful secular trends of rising power demand, the reindustrialization of major economies, and the reshaping of global supply chains, which together are driving an unprecedented need for capital." He said the climate franchise is well positioned to meet that need and to build on the momentum within its portfolio.

How the strategy developed

TPG launched Rise Climate in 2021. The strategy targets climate-related investments across types from growth equity to value-added infrastructure. The first Rise Climate fund closed in 2022 at $7.3 billion. Rise Climate II followed in 2023.

At the COP28 climate conference in December 2023, TPG announced the Global South Initiative. It aims to speed up climate solutions in emerging markets of the Global South by drawing in long-term private equity capital. Its initial commitments included $500 million from ALTÉRRA, a climate investment platform backed by the UAE, along with capital from TPG Rise Climate II.

Three investment themes

The strategy is organized around three areas. Clean electrons covers renewable energy, grid and electrification, and decarbonization of commercial and industrial users. Clean molecules and materials covers sustainable fuels and low-carbon building materials. Negative emissions covers environmental commodities, carbon markets and carbon removal solutions.

Source: ESG Today