TPG has successfully raised nearly $5 billion for its second Rise Climate private equity strategy, marking a significant milestone in its commitment to climate-focused investments. The firm has closed on $4.41 billion of the total commitments and anticipates raising additional capital to reach its fundraising goals.
Key Takeaways
TPG's Rise Climate II has garnered $4.97 billion in capital commitments.
The fund aims to raise a total of $10 billion, including contributions to the Global South Initiative.
The Hassana Investment Company has made a substantial commitment of $1.5 billion.
TPG's first Rise Climate fund closed at $7.3 billion in 2022, demonstrating strong investor interest.
Overview of Rise Climate II
Launched in December 2023, Rise Climate II has quickly attracted significant capital commitments, reflecting the growing interest in sustainable investment strategies. According to a filing with the US Securities and Exchange Commission, TPG has already closed on $4.41 billion of the $4.97 billion raised so far. The firm is optimistic about closing the remaining commitments as it continues its fundraising efforts.
Fundraising Goals and Strategy
While TPG has not publicly disclosed a specific fundraising target for Rise Climate II, reports indicate that the firm aims to raise a total of $10 billion across both Rise Climate II and the Global South Initiative. The latter is focused on climate investments in emerging markets and is expected to receive $1 billion from Rise Climate II.
Major Investments
One of the most notable commitments to the Rise Climate funds comes from the Hassana Investment Company, which has pledged $1.5 billion. This investment serves as a cornerstone for the infrastructure fund, with a portion allocated to Rise Climate II. This strategic partnership underscores the increasing collaboration between private equity firms and institutional investors in addressing climate change.
Performance of Previous Funds
TPG's first Rise Climate fund, which closed at $7.3 billion in 2022, has shown promising performance metrics. As of March 31, 2024, the fund delivered a Total Value to Paid-In (TVPI) of 1.22x and a Distributed to Paid-In (DPI) of 0.05x, indicating a solid return on investment for its backers. This performance has likely bolstered investor confidence in TPG's climate-focused strategies.
Future Outlook
Looking ahead, TPG anticipates that its climate funds will not only drive fundraising totals but also enhance profitability in 2024. Chief Executive Jon Winkelried expressed optimism during the firm's second-quarter earnings call, stating that the robust fundraising momentum is expected to continue, particularly through the Rise Climate franchise.
TPG aims to have $35 billion in assets under management within its Rise platform by the end of 2025. This platform encompasses various strategies, including Rise Climate Infrastructure, TPG Next (focused on diverse fund managers), and TPG Rise III, which closed on $2.7 billion in November 2023.
In summary, TPG's successful fundraising for its second private equity climate fund highlights the increasing importance of sustainable investments in the financial landscape, as institutional investors seek to align their portfolios with climate goals and impact investing.
Sources
TPG collects nearly $5bn for second private equity climate fund, New Private Markets.