US-based private equity firm TPG has started raising a planned-$500m clean-tech growth equity fund with corporations seen as ideal cornerstone investors.
The Alternative & Renewable technologies (Art) fund is to complement TPG’s existing biotech funds and the broader leveraged buyout portfolios.
Geoff Duyk (pictured), co-founder of TPG Biotech, will be partner and managing director (MD) of the Art fund, with Patrick McCroskey, also from the biotech unit, as the other MD.
One part of the planned fund will look at these so-called synthetic biology platforms that have applications for energy producers, agriculture and industrial companies as well as healthcare, such as TPG Biotech’s existing deals for Amyris and Elevance.
The other two members of the Art fund’s core team, Mark Gudiksen and senior adviser Charles Ward, specialise in materials and energy efficiency, respectively.
They will help look for opportunities in advanced materials, for example for light-emitting diodes or thermoelectrics for waste heat management, browntech (such as ‘greening’ coal) and renewable technology production and distribution technologies.
However, the fund is expected to call on specialists across TPG’s 600 employees in 17 offices round the world and covering energy, industrials and technology.
The fund is looking to use its network to help foreign companies build a US presence and scale American entrepreneurs overseas.
The TPG Art team has been investing in alternative and renewable technologies at the private equity firm since 2005 and has committed $290m across eight companies, with a realized and estimated value of $700m, as of September 30.
These eight are: $12m for AgraQuest, $21m for Amyris, $31m for Agria, $75m for Elevance, $4, for Fraths, $25m for Genomatica, $23m for Aphabet Energy and $99m for Beta Renewables.
A number of these deals have had corporate venturing backing, including Amyris from oil major Total, while Elevance spun out from crop company Cargill in 2008 and has a joint venture with Wilmar.
A source said TPG was hopeful corporations would be important investors in the fund based on these experiences.