Climate money handouts

U.A.E. commits $30 billion, part of which is going to TPG, BlackRock, and Brookfield

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Transacted
December 08, 2023


Happy Friday. Here’s what we’ve got today…

  • Two headline deals and a look at the UAE’s new $30 billion climate commitment

  • The deal sheet, plus the story behind Hermès’ independence

1. SpaceX launches tender offer.

• Elon Musk’s SpaceX is reportedly approaching investors with a new tender offer that would value the company at $175 billion, first reported by Bloomberg.

• The tender could range between $500 million and $750 million and quickly follows an earlier tender completed this summer at a $150 billion valuation. The move also comes after recent rumors of an upcoming Starlink IPO, SpaceX’s satellite internet business.

• Including Starlink, SpaceX is said to have generated around $9 billion in revenue this year. It’s also benefitted from a host of technical difficulties at space launch and exploration competitors, further solidifying the company’s early dominance.

2. Woodside Energy and Santos explore merger.

• Australian natural gas producers Woodside Energy and Santos are considering a merger that could result in formation of a new $52 billion business.

• The deal would consolidate nearly all of Australia’s liquefied natural gas sector and provide some staying power in a global market that's become increasingly competitive for sub-scale players. Even if combined, the two companies have LNG volume that’s just a quarter of industry leader Shell, and half that of rival Total Energies.

• Analysts see the move as almost a necessity — in addition to scale, Woodside finds a way to fix a stagnating portfolio while Santos repairs its stretched balance sheet. That said, the talks are “at a very early stage” and could still fall apart, particularly with difficult questions around risky project delays and regulatory hurdles.

For the first two weeks of December, representatives from nearly 200 countries have gathered in Dubai to coordinate global climate action for 2024 — an event known as COP28.

The United Arab Emirates kicked off the summit with the announcement of a $30 billion commitment for a new climate-focused fund named Alterra, with the goal of putting $250 billion to work by the end of the decade.

Alterra will be managed by a newly formed firm known as Lunate Capital, launched earlier this year (with more than $50 billion of seed funding) and managed by the Abu Dhabi royal family through their Chimera Investment entity.

The fund plans to deploy the initial capital via two separate approaches: Alterra Acceleration, which will provide $25 billion to institutional climate strategies; and Alterra Transformation, which will allocate $5 billion in risk mitigation to encourage investment in the “Global South,” a collective term for emerging markets across Latin America, Asia, Africa, and Oceania.

The institutional portion is already partially spoken for, with BlackRock, TPG, and Brookfield announced as strategic launch partners for the initiative.

Brookfield will receive a $1 billion commitment to its Catalytic Transition Fund and an additional $2 billion for its Global Transition Fund II. TPG is set to receive approximately $1.5 billion for its Rise Climate II fund, while BlackRock is set to receive $2 billion to be allocated across its Climate Transition-Oriented Private Debt strategy and climate-focused infrastructure investments.

The allocations follow meaningful recent climate-focused fundraising activity from the trio. Just last year, TPG raised $7.3 billion for a climate fund, BlackRock raised more than $4 billion for a climate-focused infrastructure fund, and Brookfield raised $15 billion for a climate fund of its own.

For the U.A.E., one of the world’s largest oil producers, Alterra is the latest move in what has been heavy investment in energy transition efforts — part of a broader strategy to diversify the U.A.E.’s economy in preparation for a post-oil world, similar to the approach taken by Saudi Arabia’s Public Investment Fund.

At the same time, the Alterra launch is likely designed to provide some cover from ongoing criticism directed at the U.A.E. over its oil and gas production, with many questioning the decision to choose the nation as host for this year’s COP28 (handing it an influential role in global climate negotiations).

Not helping their cause is the appointment of Sultan al-Jaber as both Chairman of Alterra and President of the Dubai COP28 — his day job is CEO of Abu Dhabi National Oil Company (ADNOC).

Al Jaber also made matters worse with a speech late last month in which he claimed there is “no science” that says phasing out fossil fuels is necessary to keep global warming under a critical threshold. The remarks, which Al Jaber says were misinterpreted, were first revealed on Sunday by The Guardian.

Either way, it’s a safe bet that Brookfield, TPG, and BlackRock won’t be complaining about their new funding.

 DEALS, DEALS, DEALS

• AbbVie agreed to acquire Cerevel Therapeutics, a developer of small molecule therapies for neuroscience diseases, for around $8.7 billion, or a 22 percent premium to Cerevel's prior closing price.

• Honeywell International has agreed to pay around $4.95 billion to buy the building safety operations unit of Carrier Global.

• Qatar Sports Investments agreed to sell a 12.5% stake in French soccer club Paris Saint-Germain to Arctos Partners, valuing the French football club at €4 billion ($4.32 billion).

• Argosy Private Equity acquired a majority stake in Wize Solutions, a Salt Lake City-based material handling equipment installer.

• KKR agreed to acquire U.K.-based Smart Metering Systems for £1.3 billion ($1.63 billion).

• Sagard Holdings acquired a stake in Performance Equity Management, a Greenwich-based private equity firm, with an option to buy the remaining stake in 2028.

• Thayer Infrastructure Services, a utility and communications infrastructure service provider backed by Calera Capital, acquired Dynetek Solutions, a provider of underground utility services.

• Société Générale (Paris: GLE) is picking back up prior plans to sell its UK-focused private bank Kleinwort Hambros.

• Nearmap (ASX: NEA), backed by Thoma Bravo, has acquired Betterview, an AI-enabled property intelligence and risk management platform for the insurance industry.

• Sportsology Capital Partners and Ares Management are in discussions over a potential purchase of Janice Simpson's 10 percent stake in the Texas Rangers at a $2 billion valuation.

• Velocity Capital Management has acquired Parella Motorsports, a live motorsports event production business.

• Zilliant, a Madison Dearborn-backed pricing optimization and management software, acquired In Mind Cloud, a next-gen digital B2B sales platform.

• Aldine Capital Partners invested in Smart Vent Holdings, a NJ-based manufacturer of engineered flood vents.

PUBLIC OFFERINGS

• Hornbeck Offshore Services, a provider of offshore oilfield transport solutions, filed for a $100 million NYSE IPO. Current backers include Ares, Whitebox Advisors, and Highbridge Capital Management.

VENTURE & GROWTH

• Klook, an online travel agency, raised $210 million in Series E+ funding. Bessemer Venture Partners led, with participation from BPEA EQT, Atinum Investment, Golden Vision Capital, and existing long-term backers Sequoia China and SoftBank Vision Fund.

• Artbio, a radiopharmaceutical biotech focused on alpha particle therapy, raised $90 million in Series A funding. Third Rock Ventures and an undisclosed healthcare fund co-led, with participation from F-Prime Capital and Omega Funds.

• Cortex, developer of an integrated mapping and ablation solution suite for the treatment of atrial fibrillation, raised $90 million in new funding from KKR and Hellman & Friedman.

• Koho, a Canada-based digital bank alternative, raised $86 million in Series D extension funding led by Drive Capital, with participation from Eldridge Industries, HOOPP, Portage, Round13, BDC, and TTV.

• X-Energy, a firm specializing in nuclear reactor technology, raised $80 million from Kam Ghaffarian and Ares Management in an extension of its Series C, bringing the round’s total to $235 million.

• Scalable Capital, a full portfolio financial brokerage offering, raised €60 million led by Balderton, with participation from HV Capital and prior investor Tencent.

• Pontera, a provider of tech solutions for retirement advisors, raised $60 million in new funding led by Iconiq Growth, with participation from Blumberg Capital, Collaborative Fund, Hanaco Ventures, Lightspeed Venture Partners, and The Founders Kitchen.

• ContactMonkey, developer of a SaaS internal communications platform, raised $55 million in Series A funding from Updata Partners.

• MaintainX, an asset maintenance and management SaaS, raised $50 million in Series C funding. Bain Capital Ventures led, with participation from existing investors Bessemer Venture Partners, Amity Ventures, August Capital, and Ridge Ventures.

• Sarvam AI, an Indian developer of generative AI tools, raised $41 million in Series A funding. Lightspeed led, with participation from Peak XV Partners and Khosla Ventures.

• Liquid AI, an MIT spinout developing liquid neural network-based AI infrastructure, raised $37.5 million in seed funding led by OSS Capital, PagsGroup, Automattic, Samsung Next, Bold Capital, and ISAI Cap Venture, with participation from Automattic co-founder and GitHub co-founder Tom Preston Werner, Shopify co-founder Tobias Lutke, and Red Hat co-founder Bob Young.

• Igloo, a Singaporean insurance technology startup, raised $36 million in Series C funding. Eurazeo led, with participation from Openspace and La Maison.

• Air Space Intelligence, a startup focused on aerial operating systems, raised $34 million in Series B funding. Andreessen Horowitz led, with participation from Renegade Partners, Bloomberg Beta, and Spark Capital.

• Center, a developer of finance and supply chain management software, raised $30 million in Series C funding led by Top Tier Capital Partners, with participation from Durable Capital Partners.

• Rhythms, developer of an AI-powered operating system for task organization, raised $26 million in seed funding from Greenoaks, Madrona, Accel, and Cercano.

• On (formerly GameOn Technology), a developer of AI-enabled sports fan engagement platforms, raised $25 million in new VC funding. Equiam, B3 Capital, Commonwealth Financial Network, and Mirae Asset Venture Investment participated.

• Opal Security, an identity and access management security company, raised $22 million in Series B funding led by Battery Ventures, with participation from Greylock, and Box Group.

• Simply Homes, a property manager using AI to provide affordable Section-8 housing, raised $22 million in seed funding. Gutter Capital and Watchung Capital co-led, with participation from Village Global, Ambush Capital, and RavenOne Ventures, as well as several individual fintech investors.

• Babylon Chain, a Bitcoin staking protocol, raised $18 million. Polychain Capital and Hack VC co-led, with participation from Framework Ventures, Polygon Ventures, Castle Island Ventures, OKX Ventures, Finality Capital, and Symbolic Capital.

• OurSky, a provider of space-alignment data technology, raised $9.5 million in seed funding. Upfront Ventures led, with participation from Oceans Ventures, Venrex Investment Management, Marlinspike Partners, and Embedded Ventures.

• DataCebo, a developer of enterprise synthetic data solutions, raised $8.5 million in seed funding. Link Ventures and Zetta Venture Partners co-led, with participation from Uncorrelated Ventures.

• Hyme, a Danish carbon capture and storage startup, raised €8 million in new funding from existing backers Heartland A/S, Nordic Makers, North-East Ventures, and new investor VÅR Ventures.

• Sona, a music streaming service and marketplace, raised $6.9 million in seed funding from Polychain Capital, Haun Ventures, and Rogue Capital.

• Mulberri, a developer of a small business insurance platform, raised $6.75 million in Series A funding. Eos Venture Partners led, with participation from Hanover Technology Management, MS&AD Ventures, and Altamont Capital Partners.

• InpharmD, a clinically-focused AI service, raised $6.05 million in seed funding. 645 Ventures led the round, with participation from Atlanta Ventures, Y Combinator, Qlarant Capital, and SF ELC.

• Meatiply, a cultivated meat and hybrid product developer, raised $3.75 million in seed funding. Wavemaker Partners and AgFunder co-led, with participation from Seeds Capital.

• Curvance, a DeFi lending and borrowing platform, raised $3.6 million in seed funding from around 20 DAOs and developers, including Offchain Labs, Wormhole, and Polygon contributors.

FUNDRAISING

• KKR is targeting $7 billion for its first global climate fund.

• Morgan Stanley raised $1.2 billion across new growth and credit funds.

• 26North is targeting between $3 - $4 billion for its debut buyout fund.

• Falfurrias Capital raised $400 million for a new growth equity fund.

• Congruent Ventures raised $275 million for its third climate tech fund.

• NewView Capital is raising $300 million for its third special opportunities fund.

• Revaia held a €150 million first close for its second growth fund.

• Audacious Ventures is targeting $125 million for its second fund.

• Harpoon Ventures raised $125 million for a new venture fund.

THE READOUT

1. Turning down Bernard Arnault.

• How Hermès dodged LVMH’s “Wolf in Cashmere” to build a €200 billion luxury empire. — Hermès Created Europe’s Biggest Family Fortune After Spurning LVMH, Bloomberg

2. Large venture funds can’t provide the same performance as smaller rivals.

• Scale isn’t always better, at least in venture, as larger funds struggle to match the returns of smaller funds. — Big VC Funds Are Underperforming Smaller Ones and Their Future Is Dim, Institutional Investor

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