NZ Super Fund makes US$100m investment to decarbonise the real estate industry
POSTED ON: 11 November 2021
The NZ Super Fund has committed US$100 million to the Fifth Wall Climate Technology Fund, an early-stage fund managed by leading real estate technology venture capital firm Fifth Wall, that seeks to invest in new technologies to decarbonise the global real estate industry.
The investment follows the announcement by the NZ Super Fund last month that it would increase its investments in climate solutions as part of its commitment to achieving net zero emissions by 2050 or sooner.
Climate change is a significant and under-addressed challenge for the property sector. In the US, for example, real estate is responsible for 13% of GDP, but 40% of carbon emissions.
Del Hart, Head of External Investment and Partnerships for the Guardians of New Zealand Superannuation, the manager of the NZ Super Fund, said: “We’re excited about the possibilities new technologies present for the real estate sector, which by some metrics is the largest asset class in the world, and consumes around 40% of the world’s energy. In addition to delivering attractive returns, we expect this investment to be a ‘positive’ one, and will measure the decarbonisation impact it has over time.”
Brendan Wallace, Co-Founder & Managing Partner, Fifth Wall, said: “You don’t need to look further than the negotiations taking place at COP26 over the last two weeks to see that the real estate industry’s path to decarbonisation has taken the global stage. NZ Super Fund’s $100 million investment into Fifth Wall’s Climate Technology Fund symbolises the massive opportunity which lies ahead for climate tech for the global real estate industry. Real estate is the keystone industry in decarbonising the economy and I hope NZ Super Fund’s $100 million commitment encourages other real estate investors and operators to step up and begin investing in climate tech required to decarbonise the real estate industry.”
To date Fifth Wall has raised more than US$300 million towards a targeted fund size of US$500 million for the Climate Technology Fund. Existing Fifth Wall Climate Technology Fund investors include sustainability leaders from the real estate industry like Equity Residential (NYSE: EQR), Hudson Pacific Properties (NYSE: HPP), Invitation Homes (NYSE: INVH), Ivanhoé Cambridge, Kimco Realty Corporation (NYSE: KIM) and Brazilian energy company, Cosan (B3:CSAN3; NYSE:CSAN). Fifth Wall’s Climate Technology Fund represents the largest pool of capital focused on decarbonising the real estate industry.
Earlier in October the NZ Super Fund announced a €125 million investment in sustainable energy infrastructure via Copenhagen Infrastructure Partners’ Energy Transition Fund.
Founded in 2016 and based in Los Angeles, California, Fifth Wall, a Certified B Corporation, is the largest venture capital firm focused on technology innovation for the global real estate industry. With approximately $2.5 billion in commitments and capital under management, Fifth Wall pioneered the category that is today called “PropTech” and has emerged as the most active and synonymous venture capital firm within the category. Today, Fifth Wall is backed by more than 70+ investors from 15 countries, connecting many of the world's largest owners and operators of real estate with the entrepreneurs who are redefining the future of the Built World. Fifth Wall’s Climate Technology Fund builds on Fifth Wall’s leadership position in PropTech and will invest in venture and other pre-growth-stage companies focused on sustainability, decarbonisation and climate change mitigation technologies that can decarbonise the Built Environment: the places we live and work and the physical spaces around us.
The NZ Super Fund invests money on behalf of the New Zealand Government to help pay for the increased cost of universal pension entitlements in the future. By doing this the Fund adds to Crown wealth, improves the ability of future Governments to pay for universal pensions, and ultimately reduces the tax burden on future New Zealanders. A long-term, growth-oriented investor, the Fund has around NZ$60 billion (US$43 billion) in assets. The Fund is managed by a Crown entity, the Guardians of New Zealand Superannuation.