L-R) Natalie Adomait, Mark Carney, Connor Teskey, Brookfiled Asset Management
From left: Natalie Adomait, Mark Carney, Connor Teskey, Brookfiled Asset Management

Brookfield Asset Management has held a first close on its second global transition fund at $10 billion.

“We have demonstrated beyond doubt the breadth and scale of attractive investment opportunities in the transition to a net-zero economy,” Brookfield chair Mark Carney said in a statement. “By going where the emissions are, the Brookfield Global Transition Fund Strategy is aiming to deliver strong risk-adjusted financial returns for investors and make meaningful environmental impacts for people and planet.”

Global Transition Fund II, a growth equity and real assets strategy, was launched last year. The target has not been disclosed, but the announcement confirmed that it is aiming higher than the $15 billion raised for the first fund, with fundraising expected to conclude in Q3 2024. Bloomberg previously reported that it was targeting $20 billion. BGTF I closed in 2022 and is the largest impact fund raised in private markets to date.

Despite the general malaise in private markets fundraising, demand from institutional LPs for climate funds has proven robust. Connor Teskey, CEO of Brookfield’s transition business, described BGTF II’s LP base as “significantly larger” than the debut fund’s on a results call in November. “Not only is the investor spectrum widening, it is growing in terms of size of commitment as well.” BGTF II received the largest ever single LP commitment to a private impact fund when it attracted $2 billion from Altérra, the $30 billion Emirati climate vehicle announced at COP28.

Since BGTF I’s fundraise in 2021, said Teskey, “many more institutional investors around the world either have carved out a decarbonisation or transition investment bucket, or at a minimum have firmly decided that that investment strategy fits within their portfolio, and therefore they are much more willing and able to allocate capital to these strategies”.

Brookfield is not the only firm vying for a share of these institutions’ climate buckets: TPG is due to bring its second Rise Climate and debut Rise Climate Infrastructure vehicles to market in the coming months; KKR launched a climate strategy last year within its infrastructure business; and Blackstone is yet to close its fourth energy transition private equity vehicle. Apollo has also launched its second energy transition private equity fund, as NPM reported last week.

Brookfield’s chief investment officer for transition investing, Natalie Adomait, whose remit includes the Global Transition Fund, was included in our list of 50 influential individuals in sustainable private markets last month.