Finance

Climate Investors Begin Deploying Dry Powder $86Bn of Investible Dry Powder for Climate Dry powder and new Assets Under Management AUM) by quarter, 20212024 YTD $bn

The fundraising surge in 2022 allocated a large amount of uninvested capital (aka ‘dry powderʼ) to climate focused investments. From 2022 through H1 2024, increasing dry powder indicated that investors were raising capital more quickly than they were deploying as climate-focused funds marketed newer vintages. In Q3 2024, dry powder peaked at $93bn. The environment shifted in Q4 as investors start to deploy capital more quickly than it was being raised. Investors have slowed the pace of deployment, with the 2022 fund vintage deploying just 43% of its capital within two years, compared to 60% for 2020 vintages. Recent funds benefit from lessons learned through previous investments, resulting in more rigorous due diligence processes and greater selectivity in investment choices.

Content & analysis provided courtesy of Sightline Climate Distinguished Partner). For more information, visit https://www.sightlineclimate.com/

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