Brookfield Raise $2.4 Billion for Catalytic Transition Fund

The New York Stock Exchange (NYSE)-listed Brookfield Asset Management, on Monday announced it has raised $2.4 billion for the Catalytic Transition Fund (CTF), marking a significant milestone towards the target of raising up to $5 billion for deployment towards clean energy and transition assets in emerging markets.

CTF was launched at COP28 with up to $1 billion of catalytic capital provided by ALTERRA funds, the world’s largest private investment vehicle for climate finance based in the UAE with the purpose of mobilising investment at scale to finance a new climate economy.

As it looks towards innovative approaches to catalyse capital for climate solutions in emerging markets, ALTERRA’s fund commitment has been designed to receive a capped return, thereby improving risk-adjusted returns for other investors in the Fund.

Brookfield has committed to provide 10% of the Fund’s target to align itself with investment partners and investors.

Besides, Brookfield has also announced four additional investment partners for CTF – Caisse de dépôt et placement du Québec (CDPQ), an institutional investor that manages several public and para public pension plans and insurance programs in the Canadian province of Quebec, Singapore’s two sovereign wealth funds GIC and Temesek and Prudential, the American Fortune Global 500 and Fortune 500 company, among others.

These leading institutional investors are important global players in transition investing and will be valued partners to Brookfield as CTF gets deployed in its target markets. CTF has now raised approximately half of the $5 billion total capital targeted for the Fund.

CTF is focused on deploying capital into clean energy and transition assets in emerging markets in South and Central America, South and Southeast Asia, the Middle East, and Eastern Europe, Brookfield said.

This strategic partnership will help drive clean energy investment into emerging markets, where investment needs to increase six-fold over current levels to reach the $1.6 trillion required annually by the early 2030s in line with global net zero targets.

The Fund benefits from ALTERRA’s push to significantly expand private finance and fuel ambitious new climate strategies, as well as Brookfield’s global leadership in clean energy and transition investing, building on over three decades of operational experience in renewable energy technologies and its track record as the world’s largest transition investor among alternative asset managers.

More Investments Likely

The Fund expects to announce its initial investments later in 2024, and a traditional first close – with additional capital from Brookfield’s ongoing fundraising efforts through its extensive network of institutional investors – is expected by early 2025.

ALTERRA CEO Majid Al-Suwaidi said that CTF demonstrates ALTERRA’s catalytic capital as a powerful multiplier of climate finance to the Global South. This early momentum around CTF shows strong global demand not just for climate strategies, but for opportunities to invest in climate solutions in emerging markets.

Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management, said that these anchor commitments from CDPQ, GIC, Prudential and Temasek demonstrate significant momentum for the Catalytic Transition Fund. The support from the world’s most sophisticated investors for the CTF strategy underscores the unique combination of the major commercial opportunity and the climate imperative.

Marc-André Blanchard Executive Vice-President and Head of CDPQ Global and Global Head of Sustainability, sad that globally, around $6.5 trillion will be needed yearly for the energy transition over the next 15 years.

Prudential Chief Investment Officer Don Guo said that they believe there is an opportunity to drive scalable positive change in emerging markets through investing in the climate transition. Prudential’s investment in CTF underscored their belief that responsible investment is not only an environmental imperative but also a significant opportunity for growth in emerging markets.