TPG Rise Fund, the $19 billion impact investing arm of San Francisco-based private equity giant TPG, is in fundraising mode again. In a pitch to Washington’s $197 billion pension fund for public employees and teachers, TPG’s Jim Coulter touted opportunities in the rapidly growing climate change sector, including clean energy for AI infrastructure and follow-ons to clean electrification, reported The Middle Market.
The Washington State Investment Board’s investment committee recommended a $400 million allocation to TPG’s second Rise Climate Fund, which is seeking up to $10 billion.
“A number of things have changed with climate and it’s a new era in the market,” Coulter told the committee. It’s the latest sign of how large US pension funds and other long term investors are setting their sights on climate opportunities in private markets (see, “Institutional investors seek bigger stakes in climate assets in private markets”).
Institutional impact
TPG has been collecting billion-dollar commitments for its fund since late last year. Saudi Arabia’s Hassana Investment Company committed a portion of a $1.5 billion partnership with TPG. At the COP 28 climate summit, TPG secured $1 billion from Alterra, the United Arab Emirates’ $30 billion climate fund. More than two dozen major corporations, including Apple and Google, have committed a combined $1 billion.
Large and sophisticated investors, says Coulter, are essential to meeting the growing capital needs of the new climate economy.
Private equity portfolio
The second TPG Rise Climate Fund is looking to build on its predecessor, which closed at $7.3 billion in 2022. The inaugural TPG Rise Climate Fund has deployed $4.7 billion to date, and notched four exits totalling $709 million. A soon-to-close exit could reap an additional $200 million.
Last month, TPG Rise Climate acquired California-based Olympus Terminals, which transports and stores renewable fuel. TPG’s new climate fund will expand its existing portfolio of energy transition, green mobility, sustainable fuels, sustainable products and materials, and low-carbon solution investments.
