July 27, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

“It’s a time of both peril and possibility,” said Jim Coulter, founding partner and executive chairman of TPG and managing partner of TPG Rise Climate. “Climate change is a societal risk but also a generational investment opportunity.”

This opportunity has been seized by some of the world’s largest institutional investors and more than 20 of the world’s leading companies looking to invest in entrepreneurs and businesses driving global climate solutions by backing the TPG Rise Climate Fund as part of a $5.4 billion first close.

With this announcement, TPG now manages more than $11 billion in assets across TPG Rise, positioning it as the world’s largest private markets impact investment platform, and core to TPG’s growth strategy. 

Launched in early 2021, under Coulter as managing partner and former U.S. Treasury Secretary Hank Paulson as executive chairman, TPG Rise Climate brings a growth equity approach to working collaboratively with the entrepreneurs, scientists, and companies that have been pioneering innovative climate solutions over the past decade in the categories of agriculture and natural solutions, clean energy, enabling solutions, decarbonized transport, and greening industrials.

The firm explained that the fund reflects a key benchmark in the growth and evolution of TPG’s global impact investing platform through its continued focus on innovation, specialized capital, and strategy diversification.

With more than 500 investors and business builders across 12 global offices, TPG is able to deliver impact-driven capital and business building capabilities at scale. Built on this chassis, TPG Rise Climate has been designed to grow a diverse range of commercially viable technologies that have been incubated by the research community, early-stage investors, and accelerators to drive impact and performance beyond the original thesis of its investments.

“Leveraging our deep experience in impact investing, we believe TPG Rise Climate can play a positive role in catalyzing capital to combat climate change,” said Coulter. “The partnership of leading investment institutions and major corporations funding TPG Rise Climate signals a growing business community commitment to engaging in this existential issue.”

Signing on with capital commitments to TPG Rise Climate were some of the world’s largest institutional investors including Ontario Teachers’ Pension Plan Board, Public Investment Fund, Public Sector Pension Investment Board, School Employees Retirement System of Ohio, Silk Road Fund, State of Michigan Retirement System, Universities Superannuation Scheme (USS), Washington State Investment Board, Allstate AXA, and The Hartford.

The fund also was set apart from traditional private equity funds through significant participation by many multinational companies. In order to structure collaboration and exchange insights among this group, TPG has created the TPG Rise Climate Coalition. Including companies that have extensively built sustainability and climate action into their models, the coalition will regularly convene to accelerate an exchange of knowledge, investment opportunities, and best practices within the group and the broader TPG Rise Climate ecosystem.

“TPG Rise Climate includes a unique group of global institutional and corporate investors that are united by capital, innovation, and accountability,” said Paulson. “This new blend of capital and broad commitment to action is a meaningful acknowledgment of the opportunity to make a difference in the trajectory of climate change. The Rise Climate Coalition brings together leading global businesses in a shared commitment to harness the rigor of TPG’s investment process to unlock technologies, scale solutions, and deliver broad impact. Together, we can catalyze climate-focused capital to accelerate and scale climate solutions of tomorrow.”

Evidence-based research and data will be the investment decision-drivers for TPG Rise Climate as it constructs a portfolio of companies that enable carbon mitigation in a quantifiable manner.

To do so, TPG stated that it is committed to delivering economic returns while conducting strict impact assessment through Y Analytics – a public benefit LLC with a mission of understanding, valuing, and managing the social and environmental impact of an investment. The firm will use Y Analytics’ methodologies including carbon yield – a decision tool that leverages scientific, health, economic, and social science research to estimate the tons of carbon dioxide equivalent emissions avoided per dollar invested. 

“TPG has a history of innovation in impact investing, creating The Rise Fund five years ago, launching Y Analytics, and establishing a new category for private equity along with them,” said Jon Winkelried, CEO, TPG. “We are deeply proud of the platform and capabilities we’ve built in TPG Rise and are thankful to our limited partners for supporting and entrusting us in building this industry-leading initiative. We look forward to partnering with TPG Rise Climate’s investors and mission-driven entrepreneurs to continue to demonstrate the immense potential of mission-driven capital.”

With a hard cap in place at $7 billion, TPG Rise Climate is expecting to hold a final close in Q4 2021.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.