Fifth Wall closes $500 million climate fund to decarbonize real estate

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ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, July 25 — Buildings across the world contribute to nearly half of global carbon emissions.

Property tech investor Fifth Wall’s first climate fund has raised $500 million to invest in software and hardware, clean energy and energy storage, smart buildings and other decarbonization tech solutions for real estate organizations.

More than 100 real estate organizations have invested in Fifth Wall, including BNP Paribas Real Estate, CBRE, Cushman & Wakefield and Marriott International. New investors include BBVA, Hilton, MGM Resorts and American Homes 4 Rent.

Climate tech

The real estate organizations have access to the portfolio companies as potential clients. Fifth Wall has made nine investments to date, including low-carbon cement producer Brimstone, hydrogen-fuel producer Electric Hydrogen, home energy retrofitter Sealed and SPAN, which is reinventing the lowly circuit panel.

“Real estate organizations that prioritize R&D investment have developed a real competitive edge over their peers,” said Fifth Wall’s Greg Smithies. The fund brings Fifth Wall’s total assets under management to $3.2 billion.

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ImpactAlpha Editor

Roodgally Senatus

November 28, 2023

The Brief

Featured: Climate Finance

From carbon markets to curbing methane, the case for climate optimism at COP28. Even before it begins, it has become fashionable to dismiss COP28, this year’s global climate summit in Dubai, as a charade for slow-moving bureaucrats or, worse, a captive of fossil fuel interests. The case for optimism is more persuasive, writes ImpactAlpha’s Amy Cortese. The breakneck global rollout of renewable energy suggests that the low-carbon transition is not only feasible, but inevitable. The International Energy Agency expects renewables to become the world’s largest source of electricity in 2025, overtaking coal. “The difference now from even last year is the astonishing scale-up of clean energy technologies,” says Mark Campanale of CarbonTracker. At the 28th “Conference of the Parties,” the two-week global climate gathering that begins Thursday, progress is expected on goals to triple renewable energy capacity, reduce methane emissions, finalize rules for high integrity carbon credits and stand up a “loss and damages” fund to compensate lower-income countries for natural disasters and historical climate inequities.

Dealflow: Community Finance

Mission Driven Bank Fund secures $110 million for local lenders in low-income communities. The Mission Driven Bank Fund will back a pipeline of over 300 federally-insured minority depository institutions, or MDIs, and community development financial institutions, or CDFIs, to expand access to credit and other financial services in lower-wealth, rural and communities of color in the US. “The exciting part of the fund is the flexibility and the tools we have to deploy for the banks,” said Beth Bafford of Calvert Impact, which will manage the fund alongside Elizabeth Park Capital Management, a Black-led alternative asset manager. “We can do deposits. We can do equity. We can structure solutions on- or off-balance sheet.” The fund was designed by the Federal Deposit Insurance Corp. to complement the Emergency Capital Investment Program (see, “How the U.S. can boost community financial institutions to counter bank consolidation and bridge racial wealth gaps”). It is anchored by Microsoft and Truist and is targeting a $500 million final close next year.

Short Signals: What We’re Reading

☀️ Energy demand grows faster than clean energy supply. A boom of cheap renewable power in Europe and natural gas in the US has helped replace coal-fired generation. But global demand for electricity, especially China and India, is outstripping even the rapid growth of clean energy, leaving fossil fuels to fill the gap. (The New York Times)

Agents of Impact: Follow the Talent

Astanor Ventures appoints Thomas Nagy, ex- chief operating officer at 21st.BIO, as part-time operational partner based in Copenhagen… Hope Wandera, ex- of VU Venture Partners, joins Mercy Corp Ventures as an investment analyst… Social Finance Institute seeks a policy writer in Washington, DC… GenZero is recruiting an investment associate in Singapore.

Read today's brief