Fifth Wall Launches New Climate Impact Fund, Targeting $200M+

Almost three years after its initial launch, Fifth Wall was founded on the principle of utilizing capital from limited partners within the real estate development and construction sectors to support the technological advancements the industry required.

This initial concept proved highly successful, enabling the firm to expand from a single $212 million fund to managing approximately $1.2 billion in assets. Through this growth, the company identified a significant gap in its current investment strategies – a lack of focus on technologies related to climate change.

Recognizing this deficiency, the firm is now working to establish a new investment fund specifically dedicated to climate-focused initiatives, aiming to raise at least $200 million, and has recruited a new partner to oversee the allocation of these funds.

Today, Fifth Wall announced the addition of Greg Smithies, previously a partner at BMW iVentures and a seasoned investor in climate technologies, to the team. He will collaborate with Tyson Woeste to deploy the capital raised by the new fund.

“Approximately a year ago, investors in real estate began to inquire about climate and sustainability issues,” explained Fifth Wall co-founder Brendan Wallace. These inquiries were driven by three primary concerns voiced by developers of commercial and residential properties.

The first concern arose from financial investors who fund these projects, increasingly requiring developers to prioritize low-carbon or carbon-neutral building practices. A second challenge came from regulatory bodies, as policymakers in cities like New York and Los Angeles began implementing carbon neutrality legislation that mandates the reduction of carbon emissions in real estate. Finally, tenants and buyers of real estate are also expressing a growing demand for decarbonized spaces, Wallace noted.

The technologies being implemented to address these concerns are often more complex and specialized than those found in the firm’s existing investment portfolio.

This is why Smithies, who previously worked at Neuralink and the Boring Company and most recently led climate investing at BMW iVentures, has joined the firm.

“I am particularly enthusiastic about the significant potential for improvement in this sector, and the sheer scale of the opportunity – there are $260 trillion worth of buildings,” Smithies stated. “The majority of these structures do not currently meet modern building standards. We will find the greatest opportunities by concentrating on practical, impactful solutions.”

Reducing the carbon footprint of real estate can significantly contribute to the global effort to combat climate change. “Real estate accounts for 40% of all energy consumption. The majority of economic activity takes place within buildings,” Wallace emphasized. “Real estate will be the largest investor in climate technology simply because of its substantial contribution to the carbon problem.