BlackRock has launched a new climate transition-oriented private debt fund (CPD), as part of the firm’s global private debt platform, which aims to provide investors with “a single-entry point to a diversified and high-quality private debt portfolio”.

The fund provides exposure to performing middle market companies and assets across a range of defensive sectors via the allocation to direct lending, opportunistic, venture capital and real asset debt. CPD is predominately focused on European and US middle market direct lending where fund investments can help accelerate borrowers’ climate transition agenda by providing support and resources.

Using a proprietary Climate Transition Rating Framework, the fund finances companies at a variety of stages of transitioning to net zero emissions and applies climate transition selection criteria so that the borrowers demonstrate satisfactory climate transition characteristics.

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During the life of the investments, the team will also actively engage with the companies it finances to support the implementation and delivery of their carbon reporting and decarbonisation targets, because it is the fund’s investment team’s conviction that companies that incorporate smart climate planning to evolve their business models will demonstrate further resilience and improved credit quality in the long run.

The portfolio will be managed by a dedicated team of private debt investors, as well as sustainability and transition investing specialists from across the firm.