By Yantoultra Ngui
SINGAPORE (Reuters) – U.S. investment firm KKR & Co is looking to raise up to $7 billion for its first global climate fund that seeks to invest in energy transition opportunities, according to a person with direct knowledge of the matter.
The New York-headquartered firm is looking to hit first-close of the fund in the first half of next year, the source added, declining to be named as the matter was confidential.
Private equity funds typically, but not necessarily, begin investing after their first-close, which is when they have received an initial round of commitments from investors.
KKR’s global climate fund will focus on investments involving environmentally friendly technologies such as energy storage, battery-related ventures and transportation, and decarbonizing of existing assets like conventional power and infrastructure, the source said.
The fund will scout for opportunities across the United States, Europe and Asia Pacific for investments of between $300 million and $750 million each, the source added.
KKR declined to comment.
KKR’s first global climate fund comes as investors are increasing their focus on investments and funds that can help fight global warming. This year’s U.N. COP28 climate summit in Dubai is now debating the future of fossil fuels, the burning of which is the biggest cause of climate change.
Goldman Sachs Asset Management, the fund arm of Goldman Sachs, announced in January that it had raised $1.6 billion for its first private equity fund focused on investing in companies providing climate and environmental solutions.
Earlier this month, the U.S. pledged $3 billion to the Green Climate Fund, an international fund dedicated to climate action.
KKR has been beefing up its climate investing strategy.
In August, the firm appointed former Goldman Sachs’ energy transition head Charlie Gailliot as co-head of its global climate strategy, less than a year after it recruited Emmanuel Lagarrigue from Schneider Electric and Neil Arora from Macquarie for the same role.
KKR has committed more than $40 billion to sustainability focused investments, including over $30 billion to climate and environmental sustainability investments since 2010, according to its website.
It announced in September a $750 million investment into British-headquartered battery solutions firm Zenobē. Other investments include Indian renewable energy platform Virescent Infrastructure and Britain’s waste-to-energy company Viridor.
(Reporting by Yantoultra Ngui; Editing by Kane Wu and Miral Fahmy)
