Toronto-based alternative asset manager Brookfield Asset Management has closed an initial $7 billion for the new Brookfield Global Transition Fund (BGTF), which helps businesses cut their carbon emissions, according to a press statement.
The fund’s founding investment partners Ontario Teachers’ Pension Plan Board (OTPP) and Singapore state investor Temasek “made major commitments” in this round, according to the statement. Other initial investors are PSP Investments and Investment Management Corporation of Ontario.
Brookfield said it plans to raise $12.5 billion for BGTF, which would make it the largest of its kind. A traditional first and second close, with additional capital from Brookfield’s institutional investors, is expected to follow in 2021.
The fund will go towards scaling clean energy and transforming carbon-intensive businesses to achieve Paris-alignment goals — the alignment of public and private financial flows with the objectives of the Paris Agreement on climate change.
“We 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,” said Bruce Flatt, CEO of Brookfield.
Steve Howard, chief sustainability officer of Temasek added, “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.”
NYSE-listed Brookfield has over $600 billion of assets under management (AUM) across real estate, infrastructure, renewable power, private equity and credit and is one of the world’s largest investors in renewable power with approximately $60 billion in AUM, installed capacity of 21,000 megawatts and a 27,000 megawatt pipeline.
Fundraisings in the clean energy sector seem to be gaining momentum. BlackRock, for instance, was reported by Nikkei Asia earlier this month to be looking to launch a $500 million fund to develop infrastructure for the transportation of green energy in emerging markets.
Similarly, Swiss infrastructure manager SUSI Partners announced in late May that it has secured a $81 million first close for its Southeast Asia-focused Asia Energy Transition Fund. Top executives of SUSI Partners told DealStreetAsia in a recent interview that the firm’s Asia Energy Transition Fund (SAETF), is committed to investing in Southeast Asia — a region the firm sees as being “overlooked by private capital” when it comes to clean energy investments.