WASHINGTON, D.C. — Private‑equity firm Permira’s chief executive Dipan Patel says the firm can still secure “best‑in‑class” deals despite a market that is seeing lower valuations and fewer bidders, a view supported by recent peer‑reviewed research on climate‑adjusted investment returns.

Patel noted that median deal valuations in the climate‑focused segment have slipped about 15% since the start of 2023, while the number of competing bidders fell roughly 30%, creating a pricing environment that could deliver “exceptional returns” for disciplined investors. “We are seeing a pricing gap that can translate into exceptional returns,” he said, adding that Permira’s capital allocation team is already repositioning pipelines.

A study published in the *Journal of Climate Economics* examined 212 private‑equity transactions from 2018‑2023 and found that climate‑adjusted internal rates of return (IRR) rose from an average of 8% to 12% when firms incorporated carbon‑risk discount factors. Lead author Dr. Elena Ruiz explained, “Our models indicate that lower discount rates for climate‑resilient assets improve net present value, especially in sectors where regulatory incentives are strengthening.”

Industry data show that climate‑focused private‑equity deals numbered 42 in 2023, down from 68 in 2022, but the aggregate capital deployed remained steady at $14 billion, suggesting that investors are concentrating on larger, higher‑quality assets. Analysts at BloombergNEF estimate that global clean‑energy investment could reach $1.2 trillion by 2030, a trend that may further buoy deal flow for firms that can navigate the tighter pricing landscape.

Critics caution that reduced competition could also mask heightened execution risk, as fewer bidders may mean less rigorous due‑diligence. Nevertheless, Permira’s track record—over 25 climate‑linked exits since 2019 with an average exit multiple of 2.4×—provides a data‑driven confidence boost for stakeholders seeking both financial and environmental performance.

Key Takeaways

• Deal valuations in climate‑focused private equity are down ~15% while bidder competition is down ~30%.
• Peer‑reviewed research links lower climate‑risk discount rates to a rise in expected IRR from 8% to 12%.
• Permira reports an average exit multiple of 2.4× on 25 climate‑related investments since 2019.

As the sector adapts to tighter pricing and a shifting regulatory backdrop, firms that can blend rigorous climate economics with disciplined capital allocation are positioned to capture the upside that analysts describe as “exceptional returns.”