BlackRock-backed Decarbonization Partners raises $1.4 billion for first fund

By Simon Jessop

LONDON (Reuters) - Climate-focused investor Decarbonization Partners, a tie-up between BlackRock and Singaporean state investment firm Temasek, said on Thursday it had raised a higher-than-targeted $1.4 billion for its first fund.

Others to back the venture and late-stage growth equity fund, which will focus on companies that can help accelerate the transition to a low-carbon economy, include U.S. insurer Allstate, Spanish lender BBVA and energy firm TotalEnergies.

In total, more than 30 institutional investors from 18 countries invested in the fund, the firm said in a statement, including public and private pension funds, sovereign wealth funds and family offices, helping it pass a $1 billion target.

The fund, Decarbonization Partners Fund I, has already invested in seven companies including low-carbon hydrogen firm Monolith, biotechnology firm MycoWorks and electric battery material firm Group14.

"There is enormous demand for energy infrastructure as many countries seek to transition to lower-carbon sources of power while also achieving energy security," said BlackRock Chief Executive Larry Fink.

Decarbonization Partners would identify "generational investment opportunities in climate technology" to lower their cost to "enable a more affordable energy transition, and generate long-term financial returns for our clients", he said.

As a so-called "dual purpose" fund, it aims to achieve good returns as well as "intentional, material and measurable decarbonization outcomes", and aims to provide portfolio companies with strategic, technical and other help, it added.

"Addressing the climate crisis requires innovation at scale, as well as significant and sustained financial resources to enable that. No single entity can do it on their own," said Temasek Chief Executive Dilhan Pillay.

"We're pleased and encouraged to see many other partners and investors coming on board ... their participation will support the acceleration of innovative solutions for real-world decarbonization at scale."

Launched in 2022, the firm now has more than 25 staff in offices in New York, San Francisco, Singapore, London, Paris and Houston.

(Reporting by Simon Jessop; editing by David Evans)