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Exclusive: Cresta raising $650M for green molecules

Illustration of a dollar bill that reads "CO2" and has an earth in the middle

Illustration: Sarah Grillo/Axios

Dallas private equity firm Cresta Fund Management is raising $650 million for a sustainability fund targeting alternative fuels and carbon capture and similar "green molecules" sectors.

Why it matters: The fund brings a big wad of cash to industrial decarbonization efforts.

The big picture: Cresta plans to back companies involved in renewable natural gas, renewable diesel and other low-carbon fuels, as well as carbon-capture companies that help make those fuels more environmentally friendly.

  • The technologies "can solve a whole range of greenhouse gas problems that current electricity-only solutions aren't addressing," managing partner Chris Rozzell tells Axios.
  • "Agricultural waste is a real problem that has to be dealt with, and it's a real greenhouse gas hit. And there's no amount of wind or solar that's going to stop cows from emitting methane."

Zoom in: Cresta began raising Sustainable Fund II in early 2024. It expects to reach final close in Q1 2025.

  • The firm plans to back up to 10 companies through the fund, writing first checks of $30 million to $100 million, typically as control investments.
  • Most of the fund's LPs are endowments and foundations.

Cresta previously raised an energy fund in 2017 targeting conventional assets such as oil and gas. It closed its first sustainability-focused fund in 2021, raising $291 million, per PitchBook.

What's next: Cresta this week expects to close its first investment, in a renewable fuels company, followed soon by an investment in the carbon capture sector.

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