General Atlantic seeks $4bn to scale climate change companies

The private equity firm is investing in companies 'uniquely positioned' to grow quickly by providing climate change solutions.

Private equity firm General Atlantic is seeking to raise $4 billion for a new business venture that will invest in fast-growing companies scaling climate change solutions, according to people familiar with the matter.

General Atlantic, which manages more than $65 billion in assets around the world, has launched a new investment platform called BeyondNetZero and has brought on former BP chief executive John Browne to lead the new venture as chairman, the sources told New Private Markets. BeyondNetZero is targeting net returns between 15-20 percent for growth equity investments across sectors in companies building out technologies that curb carbon emissions, according to the sources.

Founded in 1980, New York-based General Atlantic is led by Bill Ford and has found success over the years investing in technology companies that have matured past venture capital funding but have not yet held initial public offerings. Early bets the firm has made include backing Chinese conglomerate Alibaba Group and online travel agency

Along with Browne, who ran one of the world’s largest oil companies from 1995-2007, General Atlantic has hired six senior investment professionals – four managing directors and two principals – in the US and Europe, with experience ranging from agriculture and renewable energy to venture and growth equity capital management.

The firm plans to commit its own capital up to $1 billion, or one-quarter of the fundraise, and will write cheques ranging between $25 million and $300 million, the sources said. Through BeyondNetZero, General Atlantic seeks to “identify and scale” carbon-reducing technologies being deployed in the firm’s four target sectors: healthcare, consumer products, financial services and life sciences.

“Growth equity is uniquely positioned” to drive a global economic shift towards climate-resilient businesses, Ford said in a statement announcing the launch of BeyondNetZero.

“Addressing global climate change requires both a systemic transformation of the energy economy and scale of investment never seen before,” Ford said. “Technology, innovation and entrepreneurship will play a vital role in this monumental transition.”

To measure the firm’s environmental impact, General Atlantic is partnering with the climate data collection group SYSTEMIC, the statement said. It is also considering adopting industry disclosure frameworks, a source explained.

Fighting climate change has quickly emerged as a hot investment theme for asset managers seeking high returns and good social credit for investing sustainably.

Last month, private equity firm TPG announced it was launching a $5 billion climate-focused fundraise, while investment bank Goldman Sachs raised nearly $1 billion for its own environmental impact fund. The increasing necessity of climate resiliency is also creating new opportunities in lower-income markets that have lacked investments in new infrastructure and cleaner energy.

General Atlantic declined to comment for this story.