Morgan Stanley Investment Management (MSIM) has announced the first close of its 1GT climate private equity strategy (1GT), securing $500 million in equity capital commitments. Investors in this initiative include public and private pension funds and an insurance company in the Nordic region, Germany, and the UK. 1GT aims to invest in growth-stage companies that will strive to avoid or eliminate one gigaton of carbon dioxide-equivalent (CO2e) emissions from Earth’s atmosphere between the time of investment and 2050. The 2050 deadline coincides with the United Nations mandate for achieving “Net Zero” emissions.
Vikram Raju, MSIM’s Head of Climate Private Equity Investing and 1GT, remarked, “Reaching our halfway goal is a significant milestone. Our anchor investors have shown their strong commitment to addressing climate change by backing 1GT, which has dual goals of investing in high-growth companies in Europe and North America while aiming to deliver transformational climate impact at the gigaton level. Linking the team’s incentive compensation to both 1GT goals underscores this commitment. As a result, we have begun executing on our pipeline at a highly reasonable phase in the growth equity market.”
The 1GT forms part of Morgan Stanley Investment Management’s $200 billion alternative investments business and targets private companies across the mobility, power, sustainable food and agriculture, and circular economy sectors. As an Article 9 fund under the Sustainable Finance Disclosure Regulation, 1GT promotes environmental or social characteristics and incorporates sustainability into the investment process in a binding way. Recently, the team co-led a $50 million funding round for Everstream Analytics to expedite global supply chain sustainability and aim to cut emissions for leading global brands.
Jessica Alsford, Chief Sustainability Officer and CEO of the Institute for Sustainable Investing, expressed her view on this achievement: “1GT’s success demonstrates the strong demand for innovative products and solutions that aid our clients in addressing climate change. It’s also a testament to Morgan Stanley’s ongoing firm-wide commitment to supporting and scaling solutions driving us toward a net-zero global economy.”
David N. Miller, Head of Morgan Stanley Private Credit and Equity, expressed his pleasure at the strong investor support for 1GT. He said, “This strategy offers our clients an innovative solution to address urgent climate issues. In addition, it leverages Morgan Stanley’s substantial resources to help portfolio companies accelerate their climate impact and earnings growth, thus creating more exit opportunities.”
Photo by MUS LIHAT on Unsplash
