Morgan Stanley Investment Management (MSIM) has held a first close for the 1GT climate private equity strategy (1GT) at USD500 million of equity capital commitments. Investors include public and private pension funds and an insurance company in the Nordic region, Germany and the UK.
1GT is focused on investments in growth-stage companies that will seek to collectively avoid or remove one gigaton of carbon dioxide-equivalent (CO2e) emissions from the Earth’s atmosphere from the date of investment through 2050, the date by which the United Nations has mandated “Net Zero” must be achieved.
Vikram Raju, MSIM’s Head of Climate Private Equity Investing and 1GT, says: “Reaching our halfway goal is an important milestone. Our anchor investors have demonstrated a strong level of climate ambition by backing 1GT with its twin goals of investing in compelling high-growth companies in Europe and North America while aiming to deliver transformational climate impact at the gigaton level. Tying the team’s incentive compensation to both of the 1GT goals recognises this in equal measure. We have begun executing on our pipeline at a very opportune phase in the growth equity market.”
Part of MSIM’s USD200 billion alternative investments business, 1GT targets investments in private companies across the mobility, power, sustainable food and agriculture, and circular economy themes. Under the Sustainable Finance Disclosure Regulation, 1GT is an Article 9 fund, which promotes environmental or social characteristics and integrates sustainability into the investment process in a binding manner. The team recently co-led a USD50 million funding round for Everstream Analytics to accelerate global supply chain sustainability and aim to reduce emissions for leading global brands.
Jessica Alsford, Chief Sustainability Officer and CEO of the Institute for Sustainable Investing, says: “This achievement by 1GT clearly demonstrates the high level of demand for innovative products and solutions that help our clients seeking to address climate change. It’s also a great example of Morgan Stanley’s ongoing firmwide commitment to support and scale solutions that are helping chart a path toward a net-zero global economy.”
“We are extremely pleased by the strong investor support for 1GT,” says David N. Miller, Head of Morgan Stanley Private Credit and Equity. “This strategy provides our clients an innovative solution that seeks to address time-critical climate issues and brings Morgan Stanley’s considerable resources to portfolio companies to help accelerate climate impact and earnings growth to create more exit optionality.”
