Private equity firm TPG plans to gather $3 billion for its second social impact fund after raising the largest pool ever dedicated to the area almost a year ago.
The firm will start seeking capital for its next Rise Fund later this year, according to people familiar with knowledge of the matter. The $3 billion target is a jump up from the $2 billion gathered for its debut Rise Fund.
Large private equity firms including KKR & Co. and Bain Capital have been pushing into social impact investing. Bain Capital raised $390 million last year for a fund that focuses on mission-oriented North American companies.
The rise funds, part of TPG’s growth investing business, aim to achieve market returns while also making a positive social and environmental impact. Managing partner Bill McGlashan, whose interest in impact investing dates to when he started a non-profit group in Africa many years ago, hatched the idea for the Rise Fund. He has brought on philanthropists, social activists and business leaders to sit on the board of the fund, including musician-turned-investor Bono.
The firm earlier this year recruited former Secretary of State John Kerry to help identify investments and advise portfolio companies across a number of sectors with a focus on renewable energy.
The social impact strategy may grow to more than $300 billion by 2020, a small part of the $2.9 trillion expected to be overseen by private equity firms globally, according to a report by consultancy McKinsey & Co.
The New York Times reported Thursday on TPG’s plan to raise the second fund. Luke Barrett, a spokesman for TPG, declined to comment.