Asset AllocationFebruary 12, 2024

CalSTRS, HESTA Invest in Generate Capital’s Sustainable Infrastructure Platform

The institutional investors join AustralianSuper, among others, in the latest capital raise, which brought in $1.5 billion.

Reported by Michael Katz

The California State Teachers’ Retirement System and Australian pension fund HESTA are among the institutional investors joining in the latest round of capital raising for sustainable infrastructure platform Generate Capital PBC, which took in $1.5 billion, it announced at the end of January.

CalSTRS and HESTA—Health Employees Superannuation Trust Australia—join existing investors such as superannuation fund AustralianSuper and government-owned investment company Queensland Investment Corp. in the financing.

“Our strategic partnership with Generate Capital aligns with our mission to deliver superior financial returns for our portfolio while creating demonstrable positive outcomes for the environment and society,” said Kirsty Jenkinson, CalSTRS’ director of sustainable investment and stewardship strategies, in a release.

The $1.5 billion increases the total capital raised by Generate to more than $10 billion since its inception 10 years ago. However, Generate Capital CEO Scott Jacobs said this was far less than what is needed.

“We need to invest trillions, not billions,” Jacobs said in a release. “Ten billion dollars is just a start.”

Generate’s platform aims to invest in the infrastructure transition, which includes building and financing infrastructure assets, as well as incubating, building and financing infrastructure companies. Since its 2014 launched, Generate has worked with more than 50 project development and technology companies, as well as dozens of investors. According to the firm, as of September 2023, it had helped produce more than 320 gigawatt hours of sustainable power and had processed more than 715 kilotons of organic waste.

In December 2023, the firm formed a joint venture with school bus manufacturer Blue Bird Corp. called Clean Bus Solutions, which aims to help school districts transition to electric school buses by providing the buses and associated charging infrastructure.

“We’re at an inflection point in the transition to a clean energy economy,” Jacobs added. “While the window for action is getting smaller every day, we have the blueprints to build the critical infrastructure that will ensure a livable future.”