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Illustration: Aïda Amer/Axios

There's so much private equity and infrastructure fund action in the climate tech space these days that it's hard to keep up.

Driving the news: Brookfield Asset Management on Tuesday closed $7 billion for its Global Transition Fund that aims to scale clean energy and help carbon-intensive industries cut emissions.

  • The fund, with founding partners Ontario Teachers’ Pension Plan Board and Singapore-based investment heavyweight Temasek, has a cap of $12.5 billion.
  • The news hit about the same time that private equity giant TPG — backed by huge institutional investors and companies — announced $5.4 billion for the inaugural round of its TPG Rise Climate fund that's focused on energy, agriculture, transport, natural solutions and more.
  • Those are just the latest in a suite of recent fund announcements and closings. PitchBook calls it a "climate-focused fund frenzy," with efforts also underway from private equity firms including KKR and Carlyle.

What they're saying: "Asset owners are finally waking up to the reality of the climate crisis in a big and meaningful way, but looking to the most established asset managers to deploy their capital into climate solutions, across asset classes," Daniel Firger, managing director at Great Circle Capital Advisors, tells Axios.

The big picture: The Brookfield and TPG funds are somewhat different in focus, with the TPG money focused on growth equity investments in companies.

  • But in another way, they're of a piece, representing a surge in finance — for private equity and VC firms and infrastructure investors — heading into companies and projects that can help cut emissions.
  • "If Brookfield were to raise the full $12.5 billion it is seeking, it would amount to nearly the total capital raised by buyout firms for impact funds over the past five years," Bloomberg notes, citing the data provider Preqin.
  • And via PitchBook: "So far in 2021, global investors have already closed as many climate-focused funds as were raised during the previous five years combined."

Catch up fast: You only need to look back about 10 days to find another $6 billion heading toward clean technology companies or project finance.

  • Generate Capital, a sustainable infrastructure firm, announced it raised $2 billion on July 19.
  • That came right after General Atlantic unveiled plans to raise $4 billion for a growth equity fund focused on climate tech companies.

Quick take: There's no single factor driving the action, but market and social forces include...

  • Clean energy is increasingly cost-competitive and attractive.
  • Overall, the money surge is a bet that policymakers in big markets will continue getting more aggressive on climate.
  • Many corporate giants have set emissions-cutting targets, which drives demand for tech and projects to implement the pledges.
  • The finance industry is under growing pressure to get greener.

The bottom line: "The decarbonization opportunities are bigger and are coming sooner than we might have expected a few months ago," Brookfield's Mark Carney, the former Bank of England head, tells Bloomberg.

Go deeper

Updated Sep 23, 2021 - Axios Events

Watch: A conversation on investing in advanced climate tech

On Thursday, September 23rd, Axios business editor Dan Primack and Axios Today host Niala Boodhoo explored how alternative energy investments toward climate solutions function in the private and public sector today, featuring Sen. Ron Wyden (D-Ore.) and Galvanize Climate Solutions co-founder Tom Steyer.

Sen. Ron Wyden explained his support for overhauling the existing tax code to incentivize companies to reduce their emissions, his belief that all Americans should pay their fair share of taxes, and Congressional efforts to increase electric vehicle usage.

  • On his support for modifying the tax code: “One of the little secrets about the tax code is that many billionaires pay little or no income taxes. The way they do that is they don’t take a wage, and so Americans have read all these stories about prominent billionaires paying virtually nothing in the way of income taxes for years and years on end. I don’t think that’s right.”
  • On the future trajectory of electric vehicles: “Getting a critical mass of these electric vehicles on the road is going to bring down costs. It’s going to be good for the environment, good for marketplace forces, and the American economy.”

Tom Steyer highlighted the importance of cleaning up electricity generation across the country, how the climate tech investment landscape has changed over the last decade, and what areas of climate tech he believes need more attention and investment.

  • On the future of the infrastructure and reconciliation bills: “I believe that the Democratic Party will come to a negotiated place which will include very important climate regulations, climate initiatives, and that specifically they will be encouraging the move to clean electricity generation across the United States during this decade.”
  • On the need for more tangible innovations in climate tech: “It’s going to be incredibly important for us too to do well in the businesses like manufacturing, where you can touch the product. We have dominated the kinds of businesses like software that you can’t touch.”

Axios co-founder and CEO Jim VandeHei hosted a View from the Top segment with HSBC’s Group Chief Sustainability Officer Celine Herweijer, who discussed how sustainability is moving to the forefront of many corporations’ long-term goals.

  • “We’ve committed to essentially have a net zero target across all of our finance commissions portfolio. So to be able to do that, that means fundamentally changing how we finance it, fundamentally changing our risk appetite, changing our culture, our policies, our processes of capability.”

Thank you HSBC for sponsoring this event.

Go deeper: Get smarter, faster on the growing field of climate tech with our free short course.

Dan Primack, author of Pro Rata
Sep 24, 2021 - Economy & Business

The great venture capital resignation

Illustration: Rae Cook/Axios

A growing number of top VCs are calling it quits, long before typical retirement age.

Between the lines: Generational turnover isn't new for venture capital, but in the past it's been born of lean times. What we're seeing now is the byproduct of unprecedented success.

Seed VC is getting bigger players

Illustration: Annelise Capossela/Axios

Greylock this week announced a $500 million fund dedicated to seed rounds, raising eyebrows as well as questions on Twitter about whether traditional seed VCs will be left out in the cold.

Between the lines: The seed market is bifurcating, but the barbell isn't necessarily a threat to smaller investors.

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