Moving markets and winning awards

TPG made its presence felt in 2022 with head-turning forestry deals and awards wins – and it has now been named by the UAE as one of three ‘launch partners’ for its $30bn climate investment vehicle.

One of the standout takeaways from last year’s Agri Investor Global Awards was the impact that TPG’s Rise Fund and the Rise Climate Fund had on the forestry sector.

At the tail-end of 2022, Blue Source Sustainable Forests Company – a joint venture between TPG Rise subsidiary Anew Climate and Oak Hill Advisors – acquired a 1.9 million acre US timberland portfolio from The Forestland Group in a deal valued at approximately $1.8 billion.

It became one of the largest private timberland deals in US history and duly scooped the Timberland Deal of the Year award in the Global and Americas categories, with TPG Rise also taking home the Americas Timberland Fund Manager of the Year award.

What’s fascinating about how this blockbuster deal came together is the merger and acquisition spree TPG Rise had been on since January 2021, when the Rise Fund acquired Element Markets, a marketer of renewable natural gas and environmental commodities.

Element Markets was then merged in February 2022 with Bluesource, one of the oldest and biggest marketers of carbon offsets and credits, to create Anew Climate, which in turn became one of the largest marketers and originators of carbon and environmental credits globally.

The merger received a “significant new commitment from TPG Rise Climate and additional investment from the Rise Fund,” said TPG in a statement, and is majority-owned by the Rise platform. And as noted above, Anew Climate is one of two JV partners behind Blue Source Sustainable Forests Company (now Aurora Sustainable Lands), which executed the $1.8 billion forestry deal.

Now, TPG has been named alongside Blackrock and Brookfield as “inaugural launch partners” for the UAE’s flagship climate finance announcement at COP28 – the $30 billion Altérra climate vehicle, which will invest primarily in the four areas of energy transition, industrial decarbonization, sustainable living and climate technologies.

Altérra has already committed capital to TPG’s Rise Climate II Fund, as well as the firm’s Global South Initiative, which suggests capital may well trickle down to TPG’s forestry and carbon activities.

What’s more, given Altérra has been set up as a catalytic climate vehicle with an emphasis on the Global South where agricultural exports account for around 25 percent of all exports, the industrial decarbonization and sustainable living verticals may well touch on the food value chain.

And as we have heard from KKR’s Ken Mehlman: “The energy transition isn’t just where we get our energy from. It’s also dealing with how to address the climate challenge – and that’s where I think agriculture, water and land remediation are really important.”

All of which is to say that, as a climate vehicle, Altérra will move agri and timber markets in the coming years in some way or other – natural assets and natural capital are simply too important to the transition to a low carbon economy for them not to be.

And while it is probably too late in the year for Altérra’s moves in the market to land it and its partners any awards for 2023, it is surely only a matter of time until we see a TPG-like raid on our Global Awards from the climate mega-fund.

Entries to the Agri Investor Global Awards close on December 31.