Global Frontier Capital, a newly launched private equity firm targeting sustainable projects capable of generating carbon credits, is gearing up to raise its debut fund, New Private Markets understands.
The Washington DC-based firm was launched by a trio of co-founders from reforestation business Global Decarbonisation Solutions, according to its website. It is led by managing partner Andrew Mueller, a former US marine intelligence officer and current president of GDS.
GFC will seek $250 million for the GFC Global Carbon Credit Development Fund, according to a source. It began informal discussions with investors such as family offices and DFIs in H2 2024 and will formally launch the fundraise now that it has received green certification from ADGM (Abu Dhabi Global Market), the source noted.
The fund will acquire equity in carbon credit development projects linked to reforestation and avoided deforestation, the source added. It will be considered an impact strategy, with a focus on social, climate and biodiversity. Key markets are expected to include Indonesia, Colombia and West Africa, where the firm has investment partners to help find deals.
GFC will be targeting an IRR in the “high-20s”, the source said. The fund will be structured as a 10-plus-two limited partnership, with exits after the sale of carbon credits expected to include either moving assets into a long-term trust or into continuation funds.
Though its impact is expected to be measured against the World Bank Sustainable Development Goals, carried interest will not be directly tied to impact KPIs, NPM understands.
GFC declined to comment.
Its plans for a $250 million fund were first reported by Bloomberg in December 2023. The firm was said to have partnered with Abu Dhabi-based Neovision Wealth Management for the vehicle. It is unclear whether Neovision remains involved.
More than 50 managers have strategies seeking to deliver carbon sequestration through natural means, according to 2024 research from consultant Bfinance. Just Climate and Ardian brought funds to market in late 2023, but the list of GPs with dedicated natural capital funds includes AXA IM Alts, Stafford Capital, Bregal Investments, Mirova, Lombard Odier Investment Managers and Gresham House. Others, such as TPG, are investing in the space from broader climate impact funds.
A report from the Forest Investor Club, a group convened by the US State Department to accelerate investment in nature, found that nature-based solutions have the potential to account for 37 percent of the cost-effective climate change mitigation efforts needed by 2030 to meet Paris Agreement goals, citing data from the World Business Council for Sustainable Development. For this to happen annual investment into nature-based solutions needed to double by 2025 to around $384 billion.
– Charles Avery contributed to this report.
