Decarbonization Partners, a joint venture between BlackRock and Temasek, has announced the final close of US$1.40 billion ($1.90 billion) for its inaugural late-stage venture capital and growth private equity investment fund.
The final close of the Decarbonization Partners Fund I surpassed its fundraising target of US$1 billion, says the firm in an April 25 statement.
Launched in 2022, Decarbonization Partners invests in “next-generation private companies” that support the acceleration of decarbonisation and the transition to a net-zero economy.
In addition to commitments from BlackRock and Temasek, over 30 institutional investors from 18 countries participated in the fund. They include public and private pension funds, sovereign wealth funds, insurance companies, corporates and family offices across North America, Europe and Asia Pacific.
Some notable names include Mizuho Bank, MUFG Bank and TotalEnergies.
Without providing specifics, Decarbonization Partners says the fund also saw “capital commitments from a number of Singaporean institutional investors”.
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Meghan Sharp, global head of Decarbonization Partners, says the oversubscribed fundraise “demonstrates the unique strength of our team and platform”.
“Decarbonization Partners was deliberately set up as a purpose-built entity that can uniquely convene and collaborate with key players in the climate ecosystem: innovative companies, large corporates, co-investors, clients and later-stage capital providers,” adds Sharp. “I’m extremely proud to be leading this business alongside our global partners.”
The Fund’s dual-purpose investment strategy seeks to generate “attractive, long-term financial returns” while investing in companies that are driving “intentional, material and measurable decarbonisation outcomes”.
Decarbonization Partners, a SFDR Article 9 fund, has already invested in seven companies that span several innovative decarbonisation technologies.
They include investments in sustainable materials, including for improved performance in lithium-ion batteries, clean hydrogen, science-based carbon management services, low-emissions battery recycling, EV fleet management and thermal energy storage for industrial use.
The Decarbonization Partners team has grown to over 25 members, including venture capital and growth equity investment and portfolio management professionals across offices in New York, San Francisco, Singapore, London, Paris and Houston.
Addressing the climate crisis requires innovation at scale, as well as significant and sustained financial resources to enable that, says Dilhan Pillay, chief executive officer of Temasek. “No single entity can do it on their own. We’re pleased and encouraged to see many other partners and investors coming on board for Decarbonization Partners’ inaugural fund. Their participation will support the acceleration of innovative solutions for real-world decarbonization at scale.”
Larry Fink, chairman and CEO of BlackRock, notes “enormous demand” for energy infrastructure. “Many countries seek to transition to lower-carbon sources of power while also achieving energy security. Decarbonization Partners brings together the best of Temasek and BlackRock to identify generational investment opportunities in climate technology that we believe will help to bring down the green premium, enable a more affordable energy transition and generate long-term financial returns for our clients.”
