Exclusive / TPG rolls out $10 billion climate fund - Semafor

Private equity giant TPG has already invested nearly one third of a $10 billion climate-focused fund it closed less than a month ago, executive chairman Jim Coulter told Semafor. The fund, Rise Climate II, invests in companies in clean power, energy services and technology, low-carbon transportation, and industrial decarbonization in the US and Europe, as well as in emerging markets in South Asia and elsewhere. Between Rise II and TPG’s other climate-related funds, the firm controls one of the world’s largest pools of clean tech capital. And it seems to be paying off: TPG reported today a 33% boost in its third-quarter net income.

While ESG investing has fallen out of fashion on Wall Street, the AI boom has done a lot to strengthen the case for the types of companies the firm was already interested in, Coulter said: “On the long-term trend towards decarbonization investing, the world’s focus goes in and out a little bit. But underneath that trend, we’re still seeing a lot of progress. The electricity shortage around the world has given a wedge for renewables to become the baseload of the future.” A subset of the new fund focused on the developing world included $1.5 billion from the UAE’s ALTÉRRA, as well as a range of development banks, sovereign wealth funds, and institutional investors, which Coulter described as “an ensemble I’ve never seen before.” In some cases investments from this portion of the fund were able to draw in 50 times more capital from other sources, he said.