A new partnership between Carlyle AlpInvest Partners and the California State Teachers’ Retirement System (CalSTRS) is set to expand institutional access to private market investments that drive the global energy transition. The collaboration will focus on climate-aligned co-investments targeting projects and companies advancing decarbonization, clean infrastructure, and resource efficiency while embedding measurable sustainability outcomes into each transaction. The initiative brings together AlpInvest’s global private equity platform and CalSTRS’ Sustainable Investment and Stewardship Strategies (SISS) division, creating a dedicated channel for large-scale climate-focused capital deployment. For CalSTRS, the world’s largest educator-only pension fund with $333 billion in assets under management, the partnership represents a strategic extension of its long-term plan to integrate sustainability considerations into every asset class.

A New Model for Private Climate Capital

The partnership reflects a broader shift among institutional investors toward embedding climate risk and opportunity into mainstream private equity strategies. Rather than relying solely on dedicated climate funds, investors are increasingly seeking flexible vehicles that align with fiduciary goals while delivering tangible sustainability outcomes. Carlyle AlpInvest, which oversees more than $64 billion in assets and has deep expertise in private equity co-investments, will identify and underwrite investment opportunities that align with CalSTRS’ climate objectives. These deals will span North America, Europe, and select emerging markets, focusing on private companies whose growth can accelerate decarbonization or climate adaptation at scale.

“This partnership expands access to co-investment opportunities with a focus on climate,” said Todd Ruggini, Partner and Managing Director at Carlyle AlpInvest. “It builds on our long-term relationship with CalSTRS and our experience sourcing and executing transactions that meet the evolving needs of large institutional investors.”

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Aligning Scale, Strategy, and Stewardship

For CalSTRS, which has long been recognized as a pioneer in sustainable finance, the collaboration is another step in advancing its Sustainable Investment and Stewardship Strategies framework. The pension fund has steadily increased its exposure to climate-positive assets through initiatives such as its Low-Carbon Transition Readiness strategy and $20 billion Net Zero Portfolio.

By joining forces with Carlyle AlpInvest, CalSTRS gains access to a global sourcing and execution platform capable of scaling investments that balance financial returns with positive environmental and social outcomes. “Partnering with Carlyle AlpInvest adds the scale and execution expertise needed to advance our investment objectives,” said Nick Abel, Portfolio Manager for CalSTRS’ SISS division. “The collaboration enhances how we access opportunities that deliver both financial results and positive sustainability outcomes.”

The initiative underscores how pension funds are evolving from passive allocators to active co-investors, shaping the transition economy through direct ownership, engagement, and strategic capital deployment.

Intent-Based Flexibility for Real-World Impact

Unlike traditional climate funds bound by rigid thematic constraints, the AlpInvest–CalSTRS partnership adopts an intent-based investment framework. This approach allows for flexible investment across diverse themes such as low-carbon fuels, circular manufacturing, sustainable materials, and climate-resilient infrastructure. The model integrates ESG materiality into investment decisions without restricting portfolio diversification, enabling CalSTRS to pursue both performance and impact under a unified mandate.

Maaike van der Schoot, Head of Responsible Investment at Carlyle AlpInvest, said the structure was designed to evolve with the changing landscape of sustainability. “Carlyle AlpInvest is focused on building partnerships that deliver value while supporting investors’ sustainable objectives,” she noted. “This collaboration reflects our commitment to responsible investment and to helping partners pursue strategies that drive positive, strategic outcomes.”

The flexible framework mirrors a growing institutional preference for adaptable climate investment models that maintain alignment with long-term net-zero goals while allowing for regional and sectoral nuance.

Institutional Momentum Toward Climate-Aligned Private Markets

The timing of the partnership coincides with increasing regulatory and stakeholder pressure on asset owners to align portfolios with net-zero transition pathways. Frameworks such as the EU Sustainable Finance Disclosure Regulation (SFDR) and the U.S. Securities and Exchange Commission’s proposed climate-risk rules are prompting institutional investors to demonstrate quantifiable environmental impact alongside financial performance. For Carlyle, whose $425 billion global investment platform now systematically integrates ESG analytics and stewardship principles, the collaboration strengthens its role as a bridge between large-scale institutional capital and climate-aligned private equity. The firm has steadily expanded its Responsible Investment platform, positioning itself to channel capital into sectors critical to the energy transition while maintaining rigorous governance and transparency standards.

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Building the Next Generation of Climate Partnerships

The partnership between Carlyle AlpInvest and CalSTRS highlights the growing convergence of fiduciary responsibility and sustainability performance in institutional finance. As the world’s largest asset owners grapple with how to fund the low-carbon transition without compromising returns, co-investment frameworks like this offer a pragmatic blueprint for action. By combining CalSTRS’ scale and long-term mandate with AlpInvest’s sourcing expertise and global reach, the initiative demonstrates how public pension funds and private equity managers can collaborate to unlock capital for the technologies and infrastructure driving climate progress. In an era where public climate pledges often outpace private capital flows, such partnerships represent a tangible mechanism for closing the investment gap. For both Carlyle and CalSTRS, the collaboration is not only an investment strategy but a statement of intent, a recognition that the path to a net-zero economy will be built on cooperation between institutional stewardship, financial discipline, and sustainable innovation.

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