Singapore-based Temasek and New York-headquartered BlackRock have formed a partnership, Decarbonization Partners, to provide late stage venture capital and early growth private equity investment funds aimed at accelerating global efforts to achieve a net zero economy by 2050.
The two investors plan to commit an initial $(US) 600 million (c€502 million) which will be invested in funds launched by the partnership. The funds will also raise third-party capital from investors committed to achieving net zero carbon while obtaining long-term sustainable financial returns. Decarbonization Partners has a fundraising target of US$1 billion for its first fund, including capital put in by Temasek and BlackRock.
According to a joint statement the Decarbonization Partners funds will focus on early stage growth companies targeting proven, next-generation renewable and mobility technology including emerging fuel sources, grid solutions, battery storage, and electric and autonomous vehicle technologies as well as in the building and manufacturing sectors.
Significant investment opportunity says BlackRock chief
The funds will be staffed by employees from both firms, as well as a team recruited to source and undertake investments and manage the portfolio.
Temasek and BlackRock said that they share the belief that climate transition presents a significant investment opportunity. “The world cannot meet its net zero ambitions without transformational innovation,” said Blackrock chairman and CEO Larry Fink.
Fink said decarbonisation solutions and technologies need to be scaled to transform our economy. “To do that, they need patient, well-managed capital to support their vital goals. This partnership will help define climate solutions as a standalone asset class that is both essential to our collective mission and a historic investment opportunity created by the net zero transition.”