Brookfield Asset Management, the Canadian major investor, announced this Tuesday it has raised up to $7 billion for the first phase of a global fund; particularly aimed at renewable energy projects from companies and businesses around the world looking for carbon neutrality.
Firstly, the fund under consideration is the Brookfield Global Transition Fund; which has a target of $12.5 billion; among its main investors, the fund has Canada’s Ontario Teachers’ Pension Plan Board; the Singaporean sovereign investment firm Temasek Holdings; as well as others like the Investment Management Corporation of Ontario and Canada’s PSP Investments.
Secondly, the fund is possible the largest capital vehicle for renewable and energy transition projects to date; according to the company. This scale will allow Brookfield to pursue large-scale “decarbonization-driven investment opportunities.”
Thirdly, this is in fact and ambition by Brookfield; it wants to accelerate the rate of adoption of renewable energy and energy transition products; such were the words of Mark Carney; the former Bank of England governor who is now Brookfield vice-chair and its head of transition investing.
Moreover, according to a report by Bloomberg, the volume of opportunities were much larger for Brookfield that what the company had originally expected; consequently, they prompted a larger fundraising effort, said Carney. The investment fund will particularly cover technologies to reduce carbon footprint, clean electrification, electric automobiles and charging infrastructure.
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Brookfield with bigger opportunities than expected; other investors following its path
In addition, he remarked. “The decarbonization opportunities are bigger; and they are coming sooner than we might have expected a few months ago. This is a whole economy transition. So, it’s every sector. It’s every company.”
On the other hand, Carney joined Brookfield back in August 2020; his role was to help lead the company’s entry to impact investing. Goldman Sachs Group had recognized earlier this year that Brookfield was seeking to raise at least $7,5 billion for the initial fund.
Additionally, Brookfield has about $609 billion in assets under management; its funding for renewable energy comes also as a trend from major investors to pursue opportunities in the energy transition market.
Finally, as we reported previously, other investors like EQT are also increasing rapidly their financing capacity for such projects. Apollo Global Management is also seeking to raise as much as $1,5 billion for a new fund that will focus on socially-responsible investments.
