Brookfield Asset Management has raised $10 billion in the first close of its second fund dedicated to the global energy transition, signaling continued investor interest in clean energy, sustainability and a net-zero economy.
The fund’s predecessor, Brookfield Global Transition Fund (BGTF I), closed on $15 billion with contributions from LPs like the New Jersey Division of Investment, the New York State Common Retirement Fund and the Ontario Teachers’ Pension Plan.
Since its close, BGTF I has deployed capital in renewable power, carbon capture and storage, renewable natural gas, and nuclear services.
While the second vehicle isn’t expected to close until Q3 2024, Brookfield’s momentous fundraise falls in line with the flood of capital into private equity’s climate infrastructure products.
Already in 2024, some of PE’s biggest players have raised or closed vehicles dedicated to the space. In late January, KKR secured $6.4 billion for its second Asia-Pacific infrastructure fund, intended to invest in sectors including renewables, power and utilities across the region.
BlackRock also made a massive infrastructure play early this year when it agreed to purchase Global Infrastructure Partners for about $12.5 billion. GIP has made a number of acquisitions in renewable power and the energy transition, including its $3.1 billion purchase of Vena Energy, a major renewable energy producer in the Asia-Pacific region.
The continued push into the energy transition is partly a reflection of the mounting development of emerging technologies needed to improve sustainable infrastructure. PitchBook analysts anticipate that the growing opportunities will prove lucrative to investors in the space.
2024’s figures also signal sustained momentum from a successful fundraising year in 2023 for these vehicles. In fact, nine out of the 15 largest infrastructure funds to close last year invest in the energy transition, according to PitchBook’s Q3 2023 Global Real Assets Report.
This figure included Blackstone’s Green Private Credit Fund III, which closed on more than $7 billion in August.
In December, Brookfield announced it raised $28 billion for its infrastructure strategy—the firm’s largest fund ever raised. At the time, Brookfield Infrastructure Fund V had already deployed about 40% of its capital in six assets, including an investment in renewables.
Earlier last year, Apollo Global Management also launched a clean energy transition strategy with an initial $4 billion in deployable capital. The firm said it aims to deploy $50 billion in clean energy and climate capital by 2027.
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