BlackRock Raises $4.5 Billion for Climate-Focused Infrastructure Fund
- Fourth vintage of BlackRock’s flagship global diversified infrastructure equity fund series
- Fund seeks to capitalize on long-term trends of Decarbonization, Decentralization and Digitalization
- First closing secures commitments representing over half of targeted raise
BlackRock, through its Infrastructure business, has raised US$4.5 billion in initial investor commitments for BlackRock Global Infrastructure Fund IV, achieving over half of its targeted size at first closing. The Fund, which invests in essential infrastructure assets globally, secured initial commitments from a diverse group of institutional investors, including public and private pension funds, sovereign wealth funds, insurance companies and family offices. These clients are based around the world, including from the United States, Asia, Europe and the Middle East. Over 75 percent of the commitments in the Fund are from investors who have invested in prior vintages of the strategy.
The Fund is the fourth vintage of BlackRock’s flagship global diversified infrastructure equity fund series and builds on the strategy of the Global Energy & Power Infrastructure Funds. Infra IV seeks to deliver resilient cashflow and long-term capital appreciation to investors and is managed by the same global team of more than 60 infrastructure experts as its three predecessor funds. The group is led by Mark Florian and a senior team with 20 years of average industry experience, most of whom have been investing together for over a decade.
Demand for investment in infrastructure – essential for energy, industry, transport and other basic needs – is expected to significantly increase over the long term. Leveraging the team’s expertise, including unique sourcing, innovative deal construction, and active management, as well as BlackRock’s global platform, Infra IV seeks to build a diversified portfolio of essential, contracted infrastructure assets and businesses worldwide that are well-positioned to capitalize on three long-term, structural trends being accelerated by the global energy transition – Decarbonization, Decentralization and Digitalization (“3Ds”). Guided by the 3Ds, Infra IV will target investments across five sectors: Energy & Environmental, Low Carbon Power, Regulated Utilities, Transportation & Logistics, and Digital Infrastructure.
Over the coming decades, the energy transition will impact every part of the global economy, presenting significant investment opportunities for infrastructure investors. The Fund’s portfolio management team has deep experience investing in a range of infrastructure assets aligned with the transition, including carbon capture, renewable power, energy efficiency and renewable fuels. Infra IV will continue to target investments in climate solutions, while also supporting the infrastructure needed to ensure a stable, affordable energy supply during the transition.
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Image source: BlackRock
“Since the inception of our funds 14 years ago, we have continually evolved our franchise alongside the growing market opportunity in infrastructure created by the changing ways we live, work, and connect,” said Mark Florian, Global Head of Diversified Infrastructure. “The positive initial response from our investors is a testament to BlackRock’s differentiated sourcing capabilities, disciplined investment approach and commitment to creating value for our clients.”
Infra IV, which is targeting $7.5 billion, succeeds Global Energy & Power Infrastructure Fund III and recognizes that the global energy transition is driving changes in many sectors beyond energy and power. GEPIF III held a final close of US$5.1 billion in 2020 and has since fully deployed its investors’ capital into companies and projects across the global power, midstream, utility, digital and transportation sectors. These investments include, among others: Vanguard Renewables, a U.S.-based producer of renewable natural gas from agriculture and organic food waste; GasLog, a global provider of more efficient liquefied natural gas shipping services; Vopak, the operator of critical industrial storage facilities and shipping terminals; Calisen, a leading owner and installer of smart meters in the UK; Kellas Midstream, the owner and operator of key midstream energy infrastructure; and Navigator CO2, a developer of industrial-scale carbon capture pipeline system.
“Driven by long-term structural trends and macroeconomic conditions – as well as investors’ growing interest in strategies that allow them to help drive the global energy transition forward – infrastructure investing will continue to be an important component of many of our clients’ portfolios as well as a key growth driver for BlackRock,” said Anne Valentine Andrews, Global Head of BlackRock Infrastructure & Real Estate. “The success of Infra IV’s fundraise to date reflects this strong investor demand for an asset class that can provide income, inflation-mitigation and diversification against a challenging macro environment.”
BlackRock Alternatives’ infrastructure platform currently manages over US$50 billion in client assets across infrastructure equity, infrastructure debt, listed securities and solutions strategies. The team of over 230 infrastructure specialists offers investors proven global investment sourcing and sophisticated solutions to customize, manage and scale infrastructure exposure across sectors and asset classes. BlackRock is also an early mover in energy transition investing, having started investing in renewable power in 2012. The infrastructure platform has since built a leading suite of strategies designed to help clients invest in climate solutions and accelerate the transition to a low carbon economy.