In brief: TPG’s $5bn ‘wide aperture’ climate strategy

TPG’s latest impact fund is in market seeking to raise $5 billion to invest capital across a range of strategies to approach the global climate crisis.

News of the long-awaited impact strategy – TPG Rise Climate LP – broke on Friday when the Washington State Investment Board committed $400 million to the fundraise, in a story first reported by The Wall Street Journal.

The San Francisco-based firm will invest the fund using a strategy that combines growth equity, private equity and value-added infrastructure, according to details confirmed to New Private Markets. The cross-strategy approach represents what Rise CIO Mike Stone wrote about for us in March, calling for the need for a “wide aperture” view of investment expertise to tackle climate change.

With Stone’s idea that private equity can deploy “transformational sums of institutional capital with a purpose”, five areas where TPG will focus deploying climate-related capital includes clean energy and transportation, de-polluting industrial manufacturing, agriculture and future technologies.

If it hits or exceeds its $5 billion target, TPG’s climate fund would be among the largest dedicated impact vehicles raised to date. Brookfield Asset Management is currently marketing a $7.5 billion Global Transition Fund, which will focus on “the buildout of new renewables globally, as well as the operations surrounding investment by businesses to accelerate the transition to net-zero carbon”, CEO Bruce Flatt told investors in February. The firm has committed $2 billion of its own capital to the fund.

Former US Treasury Secretary Henry Paulson is overseeing TPG’s climate fund as executive chairman after leaving his post as chairman and chief executive of Goldman Sachs. Jim Coulter, co-founder of TPG, became managing partner of TPG Rise Climate in May this year as part of a leadership shuffle at the private markets firm.

The Rise platform launched five years ago and has executed more than 30 investments, driven by TPG’s thesis on impact about “the power of institutional capital in solving global issues”, Stone said.