Brookfield Asset Management has raised US$2.4 billion for its Catalytic Transition Fund (CTF), which aims to raise up to US$5 billion for deployment towards clean energy and transition assets in emerging markets.
This came as Brookfield announced four additional investment partners for CTF: CDPQ, GIC, Prudential and Temasek.
The fund was launched at COP28 in Dubai last year with up to US$1 billion of capital provided by Alterra, considered the world’s largest private investment vehicle for climate finance.
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.
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 notes that in emerging markets, investment needs to increase sixfold over current levels to reach the US$1.6 trillion required annually by the early 2030s in line with global net-zero targets.
The fund is expected to unveil 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.
Mark Carney, chair and head of transition investing at Brookfield, says: “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. We look forward to working with other like-minded investment partners to accelerate the transition in these critical and vastly underserved markets.”