ImpactAlpha, Feb. 16 – The $135 billion investment firm, based in San Francisco and Ft. Worth, is the latest publicly listed private-equity giant to make climate and impact investing a highlight of its quarterly report (for details from Brookfield, Apollo and KKR, see, “Private equity giants double down on the low-carbon transition and impact investing”).
TPG Rise, the firm’s impact investing arm, has raised $300 million in the past month to bring its first close to $1.9 billion toward a $3 billion target for its third impact fund. TPG Rise Climate is looking to follow up last year’s $7.3 billion climate fund with a climate-focused infrastructure fund and is in “discussions with potential LPs,” said the firm’s Jon Winkelried, who presided over a call with analysts yesterday.
Winkelried noted “very substantial market growth” in impact sectors. TPG’s impact strategy has $16 billion in assets across the Rise and Rise Climate funds as well as TPG Next, which helps seed and takes stakes in emerging and diverse alternative asset managers, and the Evercare health platform it acquired from Abraaj Group. The impact group logged a gross internal rate of return of 25%, outperforming all TPG strategies except for the firm’s $6 billion market solutions group.
“There’s a seismic change in what’s happening in decarbonization and climate, but also across other sectors like online ed, health care access post-COVID, financial inclusion,” said Winkelried. “If you thought of a landscape of sectors you might want to be involved in, they overlap the impact investing marketplace very strongly.”
TPG Rise Climate invested $500 million in NextTracker last February. Last week, the San Francisco-based maker of solar-tracking technology completed a $734 million IPO, the largest public debut of the year (it’s only February).
The deal “highlights the benefit of our theme-based Investing,” said Winkelried. “The IPO execution offering was highly successful with the order book well over subscribed and the stock trading up 27% on its first day.” TPG Rise Climate has also invested hundreds of millions of dollars to assemble a carbon credit origination and trading platform and put $1 billion, with Abu Dhabi’s ADQ, into an electric vehicle spin-off of India’s Tata Motors.
TPG closed a $500 million anchor commitment from CalPERS for its TPG Next fund. “We believe there’s a significant market opportunity and are committed to backing and supporting underrepresented managers in our industry,” Winkelried said. TPG Next has backed diverse-led venture firm Harlem Capital, Latino-led early-stage tech investor VamosVentures, and Black-owned real estate firm LandSpire Group.
It was TPG’s first full year earnings report as a public company. In a challenging year for fundraising last year, the firm raised $30 billion from LPs, $3.6 billion of which was raised via TPG Rise.
Roodgally Senatus contributed reporting to this article.