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Brian Deese, President Obama’s Chief Climate Advisor, Announces New Private Sector Initiative That Raised $1.2 Billion of Private Capital Commitments From Major Long-Term Investors for Climate Change Solutions
Peter Davidson, Co-Founder and CEO of Aligned Intermediary, Will Appear at Secretary of State Kerry’s Climate and Clean Energy Investment Forum in DC on Tuesday, October 20; Aligned Intermediary Initiative Aims to Mobilize the World’s Largest Asset Owners to Invest Billions in Climate Change Solutions
WASHINGTON, DC– During a press call this morning on climate change investment, Brian Deese, President Obama’s chief climate advisor, pointed to a new initiative, the Aligned Intermediary (AI), that has already raised $1.2 billion in commitments of private capital for investment in climate change solutions. The launch of AI this week responds to the President’s call in June 2015 for the private sector to help lead the global fight against climate change.
The pioneering initiative — headed up by Peter Davidson, former head of the Loan Programs Office of the Department of Energy — brings together five initial long-term investors and the support of four prominent private foundations to channel significant amounts of institutional capital into resource innovation investments — in energy, agriculture, waste, and water — across the planet.
"We’re grateful that Mr. Deese has chosen to single out the Aligned Intermediary as indicative of a promising step forward to engage the private sector in the fight against global climate change," said Davidson. "There are trillions of dollars that need to be deployed in this battle, so today’s announcement, with a very powerful launch pad, should encourage the international investment community to join in this effort."
Tomorrow, Davidson will offer more details about AI at Secretary of State Kerry’s two-day Climate and Clean Energy Investment Forum in Washington, DC, an event that will focus on private investments targeting clean energy, energy efficiency and climate change in the developing world. Details on the Forum can be found here.
Peter Davidson has assumed the role of Co-Founder and CEO for the Aligned Intermediary initiative, bringing to it a range of experience as an entrepreneur, investment banker, chairman of a family foundation, and former government official. From May 2013 to June 2015, he served as Executive Director of the U.S. Department of Energy’s Loan Programs Office, the largest project finance organization in the U.S. government — with a $30 billion portfolio of clean energy and advanced vehicle loans and loan guarantees. Previously, he founded and managed six media and marketing-related companies, was an investment banker at Morgan Stanley & Co., and served as Executive Director of the Empire State Development Corporation, the economic development agency of the State of New York. Since 2001, he has also served as Chairman of the JM Kaplan Fund, a philanthropic private foundation based in New York City.
Mr. Davidson is joined at AI by his Co-founders and a distinguished Board of Advisors, composed of leaders in related fields including private finance, philanthropy, academia, and climate science. The members to date are:
- Ashby Monk (Chairman), AI Co-Founder and Executive Director, Stanford Global Projects Center, and Senior Advisor to the Chief Investment Officer of the University of California;
- Tracey Durning, AI Co-Founder and Executive Director, Planet Heritage Foundation;
- Peter J. Pereira Gray, Managing Director, Investment Division, The Wellcome Trust
- Nigel Gormly, Head of International Direct Investment, New Zealand Super Fund;
- Sarah Kearney, AI Co-Founder and Executive Director, PRIME Coalition;
- Eric Redman, Co-Chair of the Board, Summit Power;
- Alicia Seiger, AI Co-Founder and Deputy Director, Stanford Steyer-Taylor Center for Energy Policy and Finance.
The initial group of long-term investors and their commitments to Aligned Intermediary transactions are:
- $500 million from the University of California Regents (university endowment);
- $350 million from the New Zealand Superannuation Fund (sovereign wealth fund);
- $200 million from the Alaska Permanent Fund (sovereign wealth fund);
- $100 million from TIAA-CREF (pension fund); and
- $10 million from Tamarisc (single family office).
The effort launches with the initial support of Planet Heritage Foundation, the Hewlett Foundation, ClimateWorks Foundation, and, with a commitment of support pending final approval, the MacArthur Foundation.
"Major institutional investors are ready to put much more funding behind climate change solutions," said Davidson. "Unfortunately, the market has significant barriers that often precludes them from doing that. AI was created to work in close partnership with its long term investors to better understand their specific needs in overcoming these blockages and challenges, with the goal of unlocking many billions of dollars in clean energy investment."
It is estimated the global community of long-term investors (pension funds, endowments, sovereign wealth funds, family offices, insurance companies, and foundations) command more than $100 trillion of investable capital. U.S. government agencies estimate that more than $40 trillion will need to be invested across the globe over the next 20 years to rebuild and decarbonize the global energy system in order to achieve the necessary global greenhouse gas emissions goals.
The Aligned Intermediary will act as a matchmaker between, on the one hand, developers, companies and projects that seek debt and equity capital and, on the other hand, committed, long-term, institutional investors. Specifically, it will source, screen, conduct due diligence, and structure transactions for its institutional backers so that each deal satisfies specific goals related to financial rate of return, as well as positive social and environmental impacts, with a particular focus on reducing greenhouse gas emissions.
"We’re thrilled to be co-launching an effort that will ultimately serve as an incredible resource and guide in helping the University of California Regents and other long-term investors deploy assets as strategically as possible toward projects and companies that are necessary to meet our global climate challenges," said Jagdeep Bachher, Chief Investment Officer at UC Regents. "We are confident the effort will thrive with Peter at the helm."
"Our goals are both ambitious and critical to the future of humanity," said Ashby Monk, who will serve as Chairman of the Board of Advisors. "I have the utmost confidence that Peter will be able to deliver and execute a successful strategy that serves the long-term goal of utilizing market forces to drive climate change solutions with the highest integrity and, importantly, deliver to this community a series of highly attractive investment opportunities in the domain of resource innovation."
In its initial phase, prior to spinning off as its own organization in 2016, the Aligned Intermediary initiative will be housed at and operate as a program of PRIME Coalition. PRIME Coalition is a nonprofit organization whose mission is to empower philanthropic foundations and families with the critical tools they need to support companies and projects that promise vast reduction of global greenhouse gas emissions.