Brookfield Announces $10 Billion First Closing for Second Brookfield Global Transition Fund
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Insights
The announcement of Brookfield Asset Management's $10 billion first closing for its second Brookfield Global Transition Fund (BGTF II) is a significant event for investors and the market at large. This development is indicative of a growing investor appetite for sustainable investment opportunities that align with global net zero ambitions. The scale of the fund positions Brookfield as a major player in the transition investment space, which can have a ripple effect on the market by signaling confidence in the long-term viability of the net zero economy. Investors are likely to watch the fund's performance as a barometer for the broader sector's potential returns.
Moreover, the strategic focus on clean energy, sustainable solutions and the transformation of carbon-intensive industries suggests a proactive approach to capitalizing on the expected shift in market dynamics as the world pivots towards greener energy sources. This could influence stock valuations in related sectors, potentially increasing volatility in the short term as markets adjust to new growth areas. The fund's emphasis on strong risk-adjusted returns is a reassurance that sustainability does not have to come at the expense of profitability, which could encourage more institutional investors to allocate capital towards similar initiatives.
BGTF II's investment strategy, which includes the expansion of clean energy and sustainable business models, underlines the growing importance of the energy transition in investment decisions. The fund's seed portfolio, with projects like a UK onshore renewables developer and a solar development partnership in India, reflects a geographical diversification strategy that could mitigate risks associated with regional policy changes or market fluctuations. The energy sector, especially renewables, is likely to experience increased capital inflows, which can accelerate technological advancements and drive down costs through economies of scale.
The fund's reported impact, in terms of avoided emissions, provides a tangible measure of its environmental contribution, which could set a benchmark for other funds. This metric, along with science-based sector pathways for net zero, could become a standard for evaluating the efficacy of similar investment vehicles, influencing investor expectations and potentially shaping regulatory frameworks around sustainable finance.
The successful fundraising of BGTF II reflects broader market trends towards ESG (Environmental, Social and Governance) investing, which have been gaining momentum over recent years. The substantial interest from both existing and new investors indicates a shift in investor priorities, where there is a clear demand for products that offer both financial returns and environmental impact. This trend is likely to influence asset managers to create more products that cater to this demand, potentially increasing competition in the ESG space.
The focus on decarbonization technologies and their economic value, as highlighted by Connor Teskey, CEO of Brookfield Renewable Power & Transition, suggests that the market for these technologies is maturing. The mention of emerging trends, such as clean power for the data and technology sector, indicates new investment frontiers that could disrupt traditional industries. This could lead to new market leaders and innovators, thereby affecting stock market dynamics and investor strategies in the medium to long term.
World’s largest private fund dedicated to investing in the net zero economy
On track to exceed previous transition fund size
BROOKFIELD, NEWS, Feb. 05, 2024 (GLOBE NEWSWIRE) -- Brookfield Asset Management (NYSE: BAM, TSX: BAM) (“Brookfield”) announced today that it has raised
BGTF II is co-headed by Mark Carney and Connor Teskey and focuses on investments to accelerate the global transition to a net zero economy while delivering strong risk-adjusted returns for investors. The Fund continues the predecessor fund strategy of investing in the expansion of clean energy, the acceleration of sustainable solutions, and the transformation of companies operating in carbon-intensive sectors to more sustainable business models. The Fund’s seed portfolio includes a UK onshore renewables developer and a solar development partnership in India, and the pipeline of further investment opportunities is robust. Brookfield is targeting a larger fundraise for BGTF II than its predecessor fund and continues to see a significant acceleration in transition opportunities globally.
The Fund is the successor of the inaugural Brookfield Global Transition Fund (“BGTF I”) which closed on a record
Mark Carney, Brookfield Chair and Head of Transition Investing, said:
“We have demonstrated beyond doubt the breadth and scale of attractive investment opportunities in the transition to a net zero economy. By going where the emissions are, the Brookfield Global Transition Fund strategy is aiming to deliver strong risk-adjusted financial returns for investors and make meaningful environmental impacts for people and the planet.”
Connor Teskey, CEO of Brookfield Renewable Power & Transition, said:
“Corporate demand for decarbonization technologies is now the primary driver of transition investment, delivering significant economic value as well as meaningful environmental benefits. New trends are also emerging, such as supplying reliable, clean power to the surging data and technology sector, building entirely new industrial supply chains, and scaling technologies required for industrial decarbonization. The strong first close for the latest Brookfield Global Transition Fund demonstrates the growing appetite among leading global investors to capitalize on these trends.”
Fundraising for BGTF II is expected to conclude in Q3 of this year.
About Brookfield Asset Management
Brookfield Asset Management (NYSE: BAM, TSX: BAM) is a leading global alternative asset manager with over
Brookfield operates Brookfield Renewable Partners (NYSE: BEP, TSX: BEP.UN), one of the world’s largest publicly traded platforms for renewable power and sustainable solutions. Our renewable power portfolio consists of hydroelectric, wind, utility-scale solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 32,800 megawatts of installed capacity and a development pipeline of approximately 155,400 megawatts. Our portfolio of sustainable solutions assets includes investments in nuclear services, carbon capture and storage, renewable natural gas, waste recycling, green ammonia and solar panel manufacturing.
As a signatory to the Net Zero Asset Managers initiative, Brookfield is committed to the goal of achieving net-zero greenhouse gas emissions by 2050 or sooner—in line with the Paris Agreement—across all assets under management.
For more information, please visit our website at www.brookfield.com or contact:
| Communications & Media: Simon Maine Tel: +44 (0)7398 909 278 Email: simon.maine@brookfield.com | Investor Relations: Alexander Jackson Tel: +1 416 649 8172 Email: alexander.jackson@brookfield.com |
Notice to Readers
This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations (collectively, “forward-looking statements”). Forward-looking statements include statements that are predictive in nature, depend upon or refer to future results, events or conditions, and include, but are not limited to, statements which reflect management’s current estimates, beliefs and assumptions and which are in turn based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. The estimates, beliefs and assumptions of Brookfield are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may” and “should” and similar expressions. In particular, the forward-looking statements contained in this news release include statements referring to the fundraising goals and projections for BGTF II and the avoided emissions of BGTF I.
Although Brookfield believes that such forward-looking statements are based upon reasonable estimates, beliefs and assumptions, certain factors, risks and uncertainties, which are described from time to time in our documents filed with the securities regulators in Canada and the United States, or that are not presently known to Brookfield or that Brookfield currently believes are not material, could cause actual results to differ materially from those contemplated or implied by forward-looking statements.
Readers are urged to consider these risks, as well as other uncertainties, factors and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements, which are based only on information available to us as of the date of this news release. Except as required by law, Brookfield undertakes no obligation to publicly update or revise any forward-looking statements, whether written or oral, that may be as a result of new information, future events or otherwise.
FAQ
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