Fifth Wall closes $500m climate fund

Fifth Wall has announced the $500m (£418m) close of its inaugural climate fund. The fund, the largest private fund formed to decarbonise the $10.5tn real estate industry, will invest in software, hardware, renewable energy, energy storage, smart buildings and carbon sequestration technologies Limited partnership commitments have come from American Homes 4 Rent, BBVA, British Land, Camden Property Trust, CBRE, Cosan, Durst Organization, Equity Residential, Hilton, Host Hotels & Resorts, Hudson Pacific Properties, Invitation Homes, Ivanhoé Cambridge, Kimco Realty Corporation, Lineage Ventures, MGM Resorts, NZ Super Fund, Osgoode Properties, and UDR, among others. This brings Fifth Wall’s capital under management to approximately $3.2bn. Co-founder and managing partner, Brendan Wallace, said the fund marked a shift in the industry’s approach to climate change, and was the first time that the largest owners and operators of real estate globally, as well as stakeholders in the energy sector, have come together to invest in the climate technology required to dramatically reduce the industry’s carbon footprint. “Although the real estate industry has historically been among the largest contributors to global greenhouse gases, most real estate organisations have underinvested into the critical climate tech necessary to decarbonise,” he said. “The strategic LPs in our Climate Fund have instead taken a true leadership role among the industry by making real financial commitments to address real estate’s contributions to climate change.” The real estate industry emits approximately 40% of total global greenhouse gases when emissions from each phase of a building’s life cycle are taken into account, yet estimates show that the industry has only invested approximately $94.6m into climate technology R&D over the past 10 years. With their commitments to the Climate Fund, Fifth Wall’s strategic LPs have increased that number more than fivefold. The fund has already completed strategic investments in several technology companies, including Assembly OSM, Brimstone, Clarity AI, Electric Hydrogen, Icon, Sealed, Span, Turntide Technologies and Wildcat Discovery Technologies. Investors in the fund, and throughout Fifth Wall’s ecosystem, also have access to a powerful network of technologies to help them decarbonise their real estate assets. Founded in 2016, Fifth Wall is now a certified B Corporation, and the largest venture capital firm focused on technology for the global real estate industry. More than 100 of the world’s largest owners and operators of real estate are invested in Fifth Wall’s funds. Greg Smithies, partner and co-lead of Fifth Wall’s climate investment team, said: “There is a distinction between implementing existing technologies and investing in the new technologies that will allow the industry to reach true net zero. Real estate organisations that prioritise R&D investment, like those invested in Fifth Wall’s Climate Fund, have developed a real competitive edge over their peers.” He added that it came down to an understanding of “the correlation between an unyielding commitment to climate innovation and an ample balance sheet”. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo: Brendan Wallace by Jeff Newton