Houston-based private equity firm Quantum Energy Partners sees opportunity in the growing carbon-management space.
The energy-focused firm invested in New York-based Carbon Direct Inc., which develops a platform for organizations to track and remove their carbon dioxide emissions. Quantum co-led Carbon Direct's $60 million financing round with Decarbonization Partners, a partnership between New York-based BlackRock Inc. (NYSE: BLK) and Singapore-based investment firm Temasek.
Using proceeds from the financing, Carbon Direct plans to continue investing in its carbon-management platform and scaling other offerings. The company also works with industry on purchasing lower-carbon fuels and materials and creating criteria for carbon credits.
"Organizations will need to significantly change how they manage their carbon footprint in order to meet their climate goals," said Jeffrey Harris, who oversees Quantum's Innovation Fund. "We believe the combination of science and market expertise uniquely positions Carbon Direct Inc. to enable organizations to operationalize carbon management and have a meaningful impact on climate change."
Houston companies in industries ranging from energy finance to oil and gas production to clean energy development are investing in the carbon-management space, including in applications for carbon capture, utilization and storage. For instance, Houston-based Occidental Petroleum Corp. (NYSE: OXY) and its subsidiary 1PointFive are preparing to begin construction on the world's largest direct air capture facility in the Permian Basin later this year.
Several provisions in the recently passed Inflation Reduction Act are aimed at scaling the development of carbon-capture technologies through tax credits. Under the new law, the tax credit was increased to $85 per ton of stored CO2 and decreases the eligibility threshold for qualifying projects.
Quantum is one of the largest energy-focused PE firms in the Houston market. The firm and its affiliates have managed more than $18 billion in capital commitments since first launching in 1998. Quantum has a portfolio of interests in oil and gas, renewable energy, energy services, energy technology and other sectors.
Earlier this year, Quantum announced changes to its leadership team with promotions and new hires. Managing Partner Ajay Khurana, who also leads Quantum's credit and structured capital platform, QL Capital Partners, was promoted to the firm's co-president. Quantum also hired Charles Baillie as its second co-president; he is joining in September after spending nearly 30 years with Goldman Sachs.
