Partners commit $600 million to new venture

BlackRock, the world’s largest asset manager, and Singapore-based investment company Temasek announced today an agreement to launch Decarbonization Partners, a new venture capital and private equity partnership aiming to invest in companies providing technologies and solutions that help accelerate the transition to a net zero economy by 2050.

The partners announced that they will commit a combined US$600 million in initial capital to invest in multiple funds launched by the partnership, and will also seek to raise third party capital, setting a $1 billion fundraising target for the first fund. The funds will be staffed by employees from both firms, as well as a professional and dedicated team recruited to source and undertake investments and manage its portfolio.

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BlackRock has emerged as a leading voice on addressing climate change in the investment industry, with Chairman and CEO Larry Fink’s landmark 2020 letter to CEOs indicating that climate action would become a central consideration in the firm’s investment process going forward. Fink followed up this year with a letter highlighting the risks and opportunities to companies and investors from the global transition to a net zero economy, and outlining BlackRock’s own net zero initiatives and commitments. Temasek has also been active on the climate front, launching a goal to reduce portfolio emissions by half by 2030, and to work towards achieving net zero carbon emissions by 2050.

Larry Fink said:

“The world cannot meet its net zero ambitions without transformational innovation. For decarbonization solutions and technologies to transform our economy, they need to be scaled. 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.”

Decarbonization Partners will launch a series of late stage venture capital and early growth private equity investment funds, with a 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 building and manufacturing sectors to drive decarbonization, resource efficiencies, and material and process innovation.

According to BlackRock and Temasek, the new partnership combines both firms’ expertise in private markets to invest in companies and proven technologies that will reduce and potentially eliminate carbon emissions, while leveraging each firm’s firms’ expertise in sourcing and underwriting private investments, portfolio and risk management, and sustainable technology and analytics.

Dilhan Pillay, Chief Executive Officer of Temasek International, said:

“Bold, aggressive actions are needed to make the global net zero ambition a reality. Decarbonization Partners represents one of several steps we are taking to follow through on our commitment to halve the emissions from our portfolio by 2030, and ultimately move to net zero emissions by 2050. Through collective efforts with like-minded partners, we will be able to create sustainable value for all of our stakeholders over the long term, and investors will have the opportunity to help deliver innovative solutions at scale to address climate challenges.”