Power Sustainable Lands $330 Million for Private Equity Fund

(Bloomberg) -- Power Corp. of Canada’s climate-focused alternative asset manager secured $330 million for a new private equity strategy based on decarbonization, betting that long-term trends will outweigh any current pushback against green technology.

“The highlight for us is that we secured these commitments in a tough market with some very serious institutional investors at a time where people are saying that this can’t get done,” Bruce Heyman, chief executive officer of Power Sustainable, said in an interview. 

The money will be invested in mid-market North American companies “that are showing really good profitability, but yet have the opportunity with a majority investor, or a large-stake minority investor, to come in and help with operational efficiencies,” Heyman said. One example might be a company that needs capital to improve its energy efficiency, he said, though he declined to identify any potential targets for investment.

Some of the capital came from Power Corp. and one of its subsidiaries, Canada Life, along with Export Development Canada and Fonds de Solidarite FTQ, a labor-sponsored fund. “We are at the very beginning stages,” said Heyman. 

The Montreal-based asset manager may use leverage in some instances on top of equity investments with its partners.

“Canada has a unique opportunity to lead in reducing emissions, and our country’s medium-sized companies are well positioned to accelerate decarbonization efforts while enhancing competitiveness,” Guillermo Freire, an executive with EDC’s mid-market group, said in a statement.

“There is a way to get a good return investment in energy transition,” Adriana Mendez, Caisse de Depot et Placement du Quebec’s director of sustainability, said during an event in Montreal. The C$473 billion ($343 billion) pension fund is an important global player in sustainable investments. “Financial innovation can play a role in the energy transition, that’s for sure.”

Power Sustainable had C$4.2 billion in assets under management at the end of 2024. It manages private equity and credit funds through three other strategies that focus on renewable energy, sustainable infrastructure and agri-food companies. The firm has yet to reach profitability, reporting a C$178 million loss last year in Power Corp.’s earnings, mainly stemming from investing activities and adjustments. It restructured last year as it wound down its China public equities strategy.  

Heyman was a managing director at Goldman Sachs Group Inc. before serving as the US ambassador to Canada during the Obama administration. 

(Update with statement from Guillermo Freire in sixth paragraph and more details on Power Sustainable’s loss in eight paragraph.)

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