A private equity fund of $1.6 billion targeted at investing in companies providing climate and environmental solutions has been raised by Goldman Sachs Asset Management, the fund arm of Goldman Sachs (GS.N).
The equity fund by GSAM’s is coming at a time investors are increasingly turning their attention to companies that can help in the global fight against global warming caused by climate change.
Launched in 2021, the fund provides what it called “growth capital” to companies that are focused in developing solutions in clean energy, sustainable transport, waste and materials, sustainable food and agriculture and ecosystem services.
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“Lots of organisations are trying to operate more sustainably and looking for solutions that enable them to do that.
“The centre of the bullseye that we look for … is if we can invest in companies that have products and services that enable other organisations to cost-effectively meet their sustainabilty objectives, that’s a winner,” Ken Pontarelli, head of sustainable investing for private markets within Goldman Sachs Asset Management, told reporters from Reuters.
So far, GSAM’s Horizon fund has made 12 investments of between $80 million-$90 million including in Northvolt, a Swedish battery developer and Recover, a company that recycles textile waste to create sustainable fibres.
According to Pontarelli, each investment targets and is measured on specific sustainability outcomes such as acres of wetlands restored or tons of CO2 sequestered.
While investors have long invested in real assets such as wind and solar, or in early-stage venture capital, the demand for the fund showed they were increasingly willing to back bigger companies, he said.
“In 2019 you saw greater willingness of institutional allocators to think about climate as a big theme beyond just the hard assets,” he said. “In every quarter [since] we’ve seen more client interest in and around this theme.”
Story was adapted from Reuters.
