Climate-Focused Vision Ridge Raises $1.25 Billion for Green Bets

Vision Ridge Partners raised $1.25 billion for its third sustainable asset fund, boosting the climate-focused private equity firm’s arsenal of capital to pursue deals targeting the shift to clean energy and green power.

The Boulder, Colorado-based firm’s latest fund is its largest to date and will invest in sectors being transformed by sustainability efforts, such as energy, transportation and agriculture, according to Reuben Munger, Vision Ridge’s managing partner. The fund will focus on themes such as the electrification of transportation, including investing in vehicle fleets and charging infrastructure, as well as the transition to low-carbon energy with a focus on battery power and storage.

“Sustainable real assets and real assets are effectively converging,” Munger, 47, said Tuesday in an interview. “We decided the best returns could come from being part of this transition away from fossil-fuel assets and to build a portfolio of renewable and zero-carbon assets based on this change.”

Vision Ridge, which was started by Munger in 2008 and manages $2.45 billion, has been investing in renewable projects for more than a decade. The arena is increasingly being targeted by investors as countries and companies across a range of sectors seek to cut emissions. Warburg Pincus is shifting away from fossil-fuel investments for its next global buyout fund, and Tikehau Capital recently garnered almost 1.1 billion euros ($1.3 billion) for a fund focused low-carbon energy.

The money-gathering comes as President Joe Biden unveiled a $2.25 trillion U.S. infrastructure plan Wednesday that will pump cash into renewable energy, transportation, manufacturing and efforts to combat climate change.

Vision Ridge raised its new fund in four and a half months and surpassed its original $1 billion target. It’s seeking to make eight to 12 investments at a value of $75 million to $175 million.

Vision Ridge’s second fund gathered $670 million in 2018 and its investments include Highland Electric Transportation Inc., which is involved in one of the biggest electric-bus deals in the U.S., as well as companies focused on power storage such as Guzman Energy and Key Capture Energy.

“The scale of capital that’s going to flow to sustainable assets in the next decade is measured in trillions, not in billions,” Munger said. “So we’ve grown, but the opportunity set has been expanding rapidly because the economics are much, much better now as well as the policy and broader cultural priorities to address the much-needed decarbonization of transportation and power, and also to develop resilient, sustainable food supplies.”

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