Brookfield Asset Management on July 27 announced the initial closing for a $7 billion “global transition” fund that the firm said establishes the largest fund focused on the worldwide transition to a net-zero economy.
The fund, named Brookfield Global Transition Fund, is supported by founding investment partners, Ontario Teachers’ Pension Plan Board and Temasek, which both pledged major commitments and are also strategically investing alongside the fund. PSP Investments and Investment Management Corp. of Ontario are also committing as “meaningful initial investors” in the fund, according to a Brookfield release.
“We are thrilled to have this group of strategic, like-minded partners investing alongside us in the Brookfield Global Transition Fund,” commented Brookfield CEO Bruce Flatt in the release.
“We all believe that private capital has a critical role to play in addressing climate change,” Flatt continued. “Our collaboration reflects our shared determination to mobilize the resources of the private sector in delivering the innovative and impactful solutions required to effect change. We look forward to working closely with these and other investors in the Fund to deliver a positive societal impact while generating attractive returns.”
Brookfield Global Transition Fund is Brookfield’s inaugural impact fund focusing on investments that accelerate the global transition to a net-zero carbon economy, while delivering strong risk-adjusted returns to investors, the firm’s release said.
As a result of this initial capital, a hard cap of $12.5 billion has been established for the fund. It is expected that a traditional first and second close, with additional capital from Brookfield’s diverse group of institutional investors, will occur over the balance of 2021.
Co-led by Mark Carney, Brookfield vice chair and head of transition investing, and Connor Teskey, CEO of Brookfield Renewables, the Brookfield Global Transition Fund targets investment opportunities relating to reducing greenhouse gas emissions and energy consumption, as well as increasing low-carbon energy capacity and supporting sustainable solutions.
“As the world increasingly focuses on sustainability, the required capital and investable opportunities are expanding faster than originally expected, creating an even greater opportunity for large-scale investments that address climate change and generate attractive returns,” Carney added in the release. “Through this fund, we are pleased to partner with best-in-class institutions to commit the capital required to scale clean energy and catalyze companies onto Paris-aligned net-zero pathways.”
Brookfield, Ontario Teachers’ and Temasek have all announced commitments to achieving net-zero by 2050 or sooner.
Headquartered in Toronto, Brookfield Asset Management is a leading global alternative asset manager with over $600 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. The firm’s renewable power business is a leader in decarbonization strategies, as one of the world’s largest investors, owners and operators of renewable power with approximately $60 billion in assets under management, installed capacity of 21,000 megawatts (MW) and a 27,000 MW pipeline.
Ontario Teachers’ is an independent organization, also headquartered in Toronto, and the administrator of Canada’s largest single-profession pension plan, with CA$221.2 billion in net assets, as of year-end 2020. It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.6% since the plan’s founding in 1990.
Temasek is an investment company based in Singapore with a net portfolio value of S$381 billion (US$283 billion) as of March 31.
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