New York State Common Retirement Fund has committed $750 million to the Brookfield Global Transition Fund – the largest ever third-party investment in an impact fund that New Private Markets knows of.
Other investors in the fund include the New Jersey Division of Investment, which invested $300 million in the fund and committed a further $300 million in a co-investment sidecar, and the Pennsylvania Public School Employees’ Retirement System, which also invested $300 million. Brookfield has committed $2 billion of balance sheet capital to the fund. The firm is set to announce a final close of the vehicle at its $15 billion extended hard-cap – just over a year after it launched. It is targeting a 10 percent IRR. Brookfield has set its sights on building a $200 billion energy transition strategy, managing director Natalie Adomait said in a recent earnings call.
NYSCRF is not new to writing cheques of this size: it has made 15 investments of $500 million or more in the past five years across private markets asset classes, according to PEI Media’s database. Among its impact fund commitments are $150 million to the Apollo Impact Mission Fund in December 2021 and $300 million to KKR’s Global Impact Fund in 2018.
NYSCRF, which has a portfolio worth $280 billion, made the investment in Brookfield’s fund out of its real assets bucket. The pension fund is in the process of increasing its real assets allocation from 1.5 to 3 percent. It is also establishing a $20 billion Sustainable Investments and Climate Solutions portfolio to invest across public and private asset classes under director Andrew Siwo.
NYSCRF has more than $11 billion in committed capital to sustainable investments, “several of which are impact investments”, Siwo told New Private Markets last year. “SICS represents a tapestry of investments that are loosely tied to the UN Sustainable Development Goals. Across the globe, we target nine themes split equally into three categories: human rights and social inclusion (eg, health and wellbeing); climate and the environment (eg, pollution and waste management); and economic development (eg, affordable housing).”
Other fund managers in New Private Markets’ Impact 20, a ranking of largest managers of private markets impact capital by funds raised in the past five years, that have drawn large individual third-party commitments include TPG, KKR, LeapFrog and Meridiam. After NYSCRF’s commitment to Brookfield, the second largest commitment to an Impact 20 fund was the Washington State Investment Board’s $400 million commitment to TPG’s Rise Climate fund.
Do you know of any other large commitments to impact funds? Email firstname.lastname@example.org.