Energy Impact Partners launches Fund 3 with $1.5bn target

EIP, the world's 19th largest impact fund manager, has a large roster of strategic corporate LPs – although it has also raised capital from financial institutional investors in the past year.

Energy Impact Partners has returned to market with its third flagship fund, which has a $1.5 billion target, New Private Markets has learned. It is a late-stage venture, early-stage growth strategy targeting climate-tech solutions across energy, industrial, transport and built environment sectors.

EIP, the world’s 19th largest impact fund manager by capital raised, is notable for its large roster of strategic corporate LPs. Fund II – which closed in 2021 at over $1 billion – counts Microsoft’s Climate Innovation Fund, Cox Enterprises, Duke Energy, EDF Group’s EDF Pulse Holding, FirstEnergy and Xcel Energy among its investors. The firm’s investment model involves corporate LPs advising on potential investments for their scalability and applicability to corporates’ own sectors.

The firm has since been raising capital from pure-play institutional investors too: its first European venture fund, which closed last year on €390 million, was backed by Dutch pension fund APG, the Abu Dhabi Investment Authority, Norway’s Nysnø Climate Investments and another unnamed sovereign wealth fund as well as several corporates.

EIP declined to comment for this story. But in NPM‘s mid-year review series, founder and managing partner Hans Kobler noted that “the fundraising climate this year has undoubtedly been dimmed. Managers and allocators are being more conservative in where they are placing their bets across the board”. EIP was not immune to this: its Elevate Future Fund, which targets diverse and under-represented founders in the climate technology venture space, closed slightly below target earlier this year after more than two years in market.

Nevertheless, “interest in the energy transition has never been stronger”, Kobler wrote in our mid-year review. “Corporates across all sectors realise they need to have a strategy on net zero. Financial investors are going beyond their small impact allocations, realising the generational scale of the energy transition, and want to put real money to work.” Interest in EIP’s own strategies has “remained strong across all asset classes and regions from both financial and strategic investors”.