Morgan Stanley Investment Management (MSIM) has announced the final close of its 1GT climate private equity fund, securing $750 million in equity capital commitments. The 1GT fund is focused on making growth-oriented investments in companies across North America and Europe that aim to collectively avoid or remove one gigaton of carbon dioxide-equivalent (CO2e) emissions from the atmosphere by 2050. The fund’s investor group includes institutions from Europe, Japan, and North America.
Vikram Raju, MSIM’s Head of Climate Private Equity Investing and 1GT said, “We are pleased to have arrived at the final close of 1GT, a highly focused fund that is providing capital at the critical growth stage to companies whose products and services enable meaningful reduction in the global carbon footprint. 1GT’s investors saw the unique opportunity to invest in a fund with a tangible, transparent, and independently measured climate goal, which directly ties to the team’s incentive compensation.”
Half of the 1GT team’s financial incentives will be contingent on meeting the target of avoiding or removing one gigaton of CO2e emissions by 2050.
“1GT’s close represents the best of Morgan Stanley’s thinking around delivering fiduciary returns to our clients while providing transparent, transformational climate impact. We are also able to deliver to our growth stage investees the insight, expertise and access that come from being a leading global financial services firm,” said David N. Miller, Head of Morgan Stanley Private Credit and Equity.
1GT is part of MSIM’s $240 billion alternative investment business and targets private companies in key sectors such as mobility, power, sustainable food, agriculture, and the circular economy. It is classified as an Article 9 fund under the Sustainable Finance Disclosure Regulation, meaning it integrates sustainability considerations into its investment process in a binding manner.
The 1GT team plans to utilise Morgan Stanley’s resources to assist portfolio companies in driving earnings growth, expanding multiples, and enhancing exit potential, while also advancing climate change mitigation efforts and improving ESG monitoring and reporting. The fund’s current investments include companies such as Instagrid, a provider of high-performance portable batteries, Huel, a sustainable nutrition brand, and Everstream Analytics, a sustainable supply chain services provider.
