Our response to the climate crisis requires the mobilisation of daunting sums of capital. Among the fast-growing field of climate-focused funds, one in particular stands out for its scale: Brookfield Asset Management’s Global Transition Fund closed in June 2022 on $15 billion, making it easily the largest climate-focused fund and the largest private markets impact fund in existence.
More than 100 investors worldwide committed, ranging from public and private pension plans and sovereign wealth funds to insurance companies, endowments, foundations, financial institutions and family offices. Brookfield was the largest investor in the fund, having committed at least $2 billion. Another large investor was the New York State Common Retirement Fund, which committed $750 million. It was a fundraise that grew faster and larger than the firm anticipated: the $15 billion total was double what the firm originally targeted.
While it is notable for its scale, the fund’s strategy is also significant, epitomising the emerging breed of flexible styles required to channel capital to combat the climate crisis. It invests across three areas: renewable power generation, new technology-based climate solutions, and the transformation of existing carbon-intensive industries.
As such, PEI’s game changer of the year for 2022 is the head of Brookfield’s transition investing team and chair of the firm’s asset management business, Mark Carney. Having joined Brookfield in 2020, he co-leads the transition fund strategy alongside Connor Teskey, president of Brookfield Asset Management and CEO of Brookfield Renewable Partners.
Few people can claim to have done as much as Carney to encourage the global finance industry to focus on climate action. Formerly the central banker for the UK and for Canada, Carney is now the United Nations Special Envoy for Climate Action and Finance alongside his work at Brookfield.
He also spearheaded the Glasgow Financial Alliance for Net Zero, which was launched at COP26 in 2021 and has become the umbrella organisation for seven sector-specific alliances encompassing asset managers, asset owners, service providers and others. The alliance has attracted 550 members (although, perhaps ironically, few of the world’s largest private markets firms). Members commit to the goal of net zero by 2050, as well as interim targets for 2030 or earlier.
In terms of Brookfield’s ambitions for the transition-investing business, the $15 billion debut fund was just the first step. At the time of writing, in early 2023, the firm has said it will start raising the successor fund in the first half of the year, having already invested more than half of Fund I. The size and number of investment opportunities is encouraging the firm to shoot for a much larger follow-up, as well as transition-focused private credit products and perpetual capital strategies.
As conversations surrounding the tangible impact of climate-focused funds continue to dominate private markets players’ attention, Carney receives this accolade for his part in accelerating private markets’ response to the climate crisis across the past year.